Wal-Mart Retail Success Reasons

The Secrets of Success of the Retail Kingdom Wal-Mart

In August 1996, the world's number one retail brand, Wal- Mart, entered the Chinese market and set off a shopping whirlwind in Shenzhen, dazzling the traditional department store retail industry. What is Wal-Mart's marketing secret? What makes Wal-Mart the world's leading retailer?

Wal-Mart founder Sam Walton hit the nail on the head --

We work side by side, and that's the secret. We lower the cost of living for every customer. We want to give the world a chance to see what it looks like to improve the lives of all people by saving.

$93.6 billion: world record sales

No industry has a closer relationship with the daily lives of consumers than retail. An American scholar once defined the mission of retailing as "raising standards of living and spreading happiness". And Wal-Mart is one of the brightest jewels in this industry.

In 1991, Wal-Mart's annual sales exceeded 40 billion U.S. dollars, becoming one of the world's largest retail companies. According to the United States in May 1994, "Happiness" magazine released the national service industry classification list, Wal-Mart 1993 sales of up to 67.34 billion U.S. dollars, an increase of more than 11.8 billion over the previous year, more than the 1992 ranking of the first Sears (Sears), ranked first in the U.S. retail industry. 1995 Wal-Mart continued to grow in sales, and created a world record in the retail industry! In 1995, Wal-Mart's sales continued to grow and set a world record in retailing, realizing annual sales of $93.6 billion, ranking fourth on Fortune magazine's list of the 95 largest companies in the United States. In fact, Wal-Mart's annual sales equal to the sum of all U.S. department stores, and still maintains a strong momentum of development. In contrast, some large department stores in Beijing, Shanghai and Guangzhou, China's annual sales of only a few billion yuan, and Wal-Mart's difference is so big that people yesterday's tongue.

To date, Wal-Mart has 2133 Wal-Mart stores, 469 Sam's stores and 248 Wal-Mart shopping plazas throughout the United States, Mexico, Canada, Puerto Rico, Brazil, Argentina, South Africa, China, Indonesia and other places. Its rapid development in just a few decades has to be regarded as a miracle in the retail industry.

How can Wal-Mart develop rapidly from a small retail store into a large retail group and become the world's No. 1 retail brand?

First of all, Wal-Mart put forward the purpose of "help customers save every penny", and realize the promise of the cheapest price.

Secondly, it is not enough to have inexpensive goods, Wal-Mart also provides customers with new enjoyment of superb service. The company has always adhered to the "service is better than others, the staff is different" principle. Walking into Wal-Mart, customers can personally feel at home with the thoughtful service.

Again, Wal-Mart implements the new concept of "one-stop" shopping. Customers can buy all the goods they need in the shortest possible time and at the fastest speed, and it is this fast and convenient way of shopping that attracts modern consumers.

In addition, although Wal-Mart in order to reduce costs, and repeatedly cut back on advertising expenditures, but the public welfare donations, but not stingy money, widely for the good. There are pay will be harvested, Wal-Mart in the public welfare activities on a large number of long-term investment and the activities themselves have a unique creative, greatly improving the brand awareness, successfully shaping the brand in the minds of the majority of consumers in the image of excellence.

Finally, Wal-Mart can surpass Sears the most critical reason, is that Wal-Mart for different target consumers, to take different forms of retail business, respectively, to occupy the high and low-grade market. For example, Wal-Mart's affordable shopping malls for the middle and lower middle class consumers; Sam's Club stores, which provide benefits and services only to members; and Wal-Mart's department stores, which are popular with upper class consumers.

These five reasons have enabled Wal-Mart to stand out from the rest of the retail industry and build a unique retail empire of our time. The following is a detailed description of its success from these five aspects, from which domestic retail enterprises may be inspired to accelerate the process of developing international retail brands.

One, the cheapest price commitment

All the large supermarket chains have adopted a low-priced business strategy, Wal-Mart is different in that it tries to save money by all means from the purchase channels, distribution methods, and marketing costs, administrative expenses, etc., and puts forward the slogan of "Everyday prices, always the same," and strives to realize the promise of cheaper prices than the other trade names.

The strict purchasing attitude, perfect delivery system and advanced inventory management are the key factors that contribute to Wal-Mart to achieve the lowest cost and cheapest price.

Walton, the founder of Wal-Mart, once said, "We value every penny, because one of the purposes of our service is to help every customer who comes into the store to save money. Every time we save a dollar, we earn a piece of the customer's trust." To that end, he asks each buyer to be firm in their approach to purchasing goods. He cautioned, "You are not bargaining for the store, you are bargaining for the customer, and we should get the best price for the customer."

Wal-Mart generally buys its merchandise directly from the factory at the lowest possible purchase price. Once a deal is made, headquarters notifies the manufacturer to send the goods directly to a Wal-Mart shipping center. Wal-Mart has 16 shipping centers in the U.S., all located less than a day's travel from its outlets. With more than 6,000 trucks, Wal-Mart ships an average of 190,000 boxes per day. 1987 saw the establishment of the nation's largest private satellite communications system to save on communication costs between headquarters and branch offices, speed up decision-making and feedback, and improve the efficiency of the entire company's operations. High-speed computers at headquarters are connected to 16 shipping centers and more than 1,000 stores. Every item sold through a laser scanner at the store's checkout counter is automatically logged into the computer. When the inventory of a particular item is reduced to a certain amount, the computer sends a signal to alert the store to request stock from the headquarters in a timely manner. Headquarters to arrange for the supply of goods sent to the nearest store a shipping center, and then by the shipping center computer to arrange for sending time and route. In the store issued an order within 36 hours after the required goods will appear in the warehouse shelves. This highly efficient inventory management enables the company to quickly grasp the sales situation and market demand trends, and to replenish inventory shortages in a timely manner. This reduces inventory risk, lowers the amount of capital backlog, and accelerates the speed of capital operation.

Wal-Mart has also adopted warehousing operations, thus more fully reflecting the economies of scale in the cost of goods sold. For example: Sam's member stores are simply decorated, and try to use all the shelf space to store and display goods. Prices are not marked on each piece of merchandise, but uniformly marked on the shelves, as long as the bar code by scanning the goods, the cash register will accurately collect the price. Goods are mostly sold in large packages to reduce the cost of individual packaging. With the continuous improvement of China's productivity level, consumer purchasing power, many cities have the conditions to implement this model. Merchants gradually recognize the advantages of warehouse-type business model, and began some attempts, similar to the Guangkelong affordable warehouse stores have opened. At present the most critical issue is to learn from the experience of successful foreign enterprises (eg: Wal-Mart), more comprehensive and more thorough to achieve the lowest cost and achieve economies of scale.

In addition to the above points, Wal-Mart in order to reduce operating expenses, chose to compress advertising costs strategy. The United States in general, large department stores on television or newspapers to do 50-100 times a year advertising, while Wal-Mart only 12 times. In the face of advertising flooded the U.S. market, Wal-Mart boldly adopted this advertising strategy, and can long stand invincible, from which we can get a little revelation: for the businessman, additional advertising investment, turnover is not necessarily proportional to the growth. Sometimes it is better to cut back on advertising costs and reduce the cost of doing business accordingly, so that performance can be significantly improved.

Two, superb service new enjoyment

In the retail industry, comfortable shopping environment, quality and thoughtful service is inevitably linked to higher prices; and in the low price of goods in the supermarket chain, customers can often only get the shopping price concessions, but can not enjoy the quality of service. Kmart (K-Mart) is a famous large discount chain stores in the United States, its stores vast, in order to save labor costs, but very few clerks. Although the store displays a wide variety of inexpensive goods, but customers such as looking for one or two shopkeepers to ask about the problem is not an easy thing. Here, although the customer to meet the desire to buy cheap goods, but did not feel the clerk to pay a little attention to them, so in the customer's mind there is a lack of regret.

Retailers want to establish a brand image in the minds of customers, relying only on high-quality and inexpensive goods is not enough, customers also want to enjoy the shopping at the same time meticulous and generous service. Wal-Mart is to take this into account, from the customer's point of view, with its superb service to attract a large number of customers. Walk into any Wal-Mart store, the clerk will immediately appear in front of you, smiling face to welcome. The store is labeled with the slogan "We strive to do, every piece of merchandise are guaranteed to make you happy!" If a customer is not satisfied with any item purchased here, they can return it to the store within a month and receive full payment. Walton once said, "We all work for the customer, and you may think you're working for your boss, but the truth is he's just like you. There is one big boss outside of our organization, and that's the customer." Wal-Mart views superlative service as its supreme duty.

Hanging in many Wal-Mart stores are signs that read:

1. The customer is always right;

2. Gu Yung, if there is a mistake, please refer to the first one.

This is a vivid portrayal of Wal-Mart's customer first principle. Some employees lamented, "It was Wal-Mart that first made us realize that the customer is always right.

The secret of Wal-Mart's business is to constantly understand the needs of customers, put themselves in the shoes of customers, and maximize the convenience for customers. Once, a customer to the Wal-Mart store looking for a special paint, and the store just out of stock, so the paint department manager will personally take the customer to the opposite side of the paint store to buy. Both that customer and the owner of the paint store were grateful. Walton often told his employees, "Let's treat our customers with friendliness and warmth, as if we were entertaining guests at home, and let them feel that we are attentive to their needs all the time."

Three, "one-stop" shopping new concept

Whether customers can buy all the goods they need at once in the store, whether they can get timely information on the sale of new products, whether they can enjoy door-to-door delivery, free parking and other additional services, and whether they can enter the store to store at any time they have free time ...... These issues are also important in evaluating the performance of a store. are also important markers for evaluating a good or bad store.

In Wal-Mart, consumers can experience the new concept of "one-stop" shopping (One-Stop Shopping). In terms of product structure, it strives to be full of changes and characteristics to meet the various preferences of customers. It carries a wide range of items, including food, toys, new clothing, cosmetics, household appliances, general merchandise, meat, fruits and vegetables, and so on.

In addition, Wal-Mart has set up a number of special service types for the convenience of customers:

● Free parking. For example, the Sam's store in Shenzhen, with a business area of more than 12,000 square meters, has nearly 400 free parking spaces, while another Wal-Mart shopping plaza with a business area of more than 17,800 square meters also has about 150 parking spaces.

●Walmart has moved its pastry shop into the mall, and there is a "Sam's Lounge," where all the flavors and fresh pastries are available for customers to enjoy after a long day of shopping.

●The store employs professionals to provide customers with free advice on computers, cameras, VCRs and related items, which helps reduce the risk of blind purchases.

●The store has a Rendezvous Xerox document processing business center, which can provide customers with a number of services, including the production of color documents, photocopying, enlargement and reduction of engineering drawings, high-speed printing, and so on.

●Walmart offers delivery service on purchases of $2,000 or more at a time for $49 per delivery within a specified range (because delivery costs are not included in the price of the item).

●In addition, the Shenzhen Sam's Store handles all mobile computer sales, and all models sold by the Mobile Bureau. Prices are cheaper than other agency outlets 100 yuan; it also represents the sale of Runxun's communication products, on behalf of the collection of all types of models of Taiwan, a variety of Chinese machines, digital machines are cheaper than the market than other Runxun outlets 50 yuan.

In the store site selection, Wal-Mart also to facilitate customer shopping as the primary consideration. In the United States, it reaches out to small, remote towns that Sears and Kmart don't bother with. From Minnesota to Mississippi, from Southern California to Oklahoma, Wal-Mart is everywhere. Wherever a township lacked a bargain store, Wal-Mart opened.

Four, donate to the public good to establish an image

Wal-Mart in order to provide customers with more affordable, and try to minimize advertising costs, it is in the promotion of creative thinking, and strive to minimize the investment to obtain the best results. Where Wal-Mart's promotional products can always be snatched up. In promotional methods, Wal-Mart attaches special importance to play the role of event marketing (EventMarketin8). For example, in Naples California Fairbury store set up a "precision shopping float training team", and organized to participate in the local float parade activities. All team members wore Walmart uniforms and pushed the floats in formation, making them stand out in the parade. In order to add some interest to the dull and boring life of the community and create a joyful atmosphere, Wal-Mart regularly conducts a series of outdoor auctions, bands and circus performances to attract customers to come and shop. Every year on the second Saturday in October, Walmart holds an "Eat the Moon Pie" contest in the parking lot of the Oneonta store. This event attracts many customers from other states to participate and watch. News media coverage increases the visibility of the contest and Wal-Mart. In addition, when Wal-Mart's stock went public, Wall Street stock analysts and shareholders were invited to canoe down streams and camp on lakeshores.

While Wal-Mart has repeatedly cut back on its advertising spending, it has on the other hand been generous with its money when it comes to donations to nonprofit organizations and good causes, such as schools, libraries, economic development groups, hospitals, medical research programs and environmental programs.

▲Since 1983, Wal-Mart has donated $52 million to United Way charities in every U.S. state.

▲Georgia's Balsam City location hosted a pig-kissing contest to raise money for the charity.

▲Since 1988, Wal-Mart has raised $57 million to benefit the Children's Miracle TV program at children's hospitals, making it the largest sponsor.

▲Walton has also been active in funding public and private schools, setting up special scholarships to help Latin American students attend college in Arkansas. He also donates a percentage of the turnover from his own brand, Sam's America Select, to scholarships for students studying math, science and computers.

Domestic retailers are seldom willing to invest in the public welfare of the short-term direct benefit is not obvious, they are often concerned about seasonal promotions and publicity. In fact, donations to the public welfare (eg: Project Hope, etc.) is a long-term investment, in the long run to improve brand awareness, enhance corporate image has a role that can not be ignored.

V. Comprehensive coverage of market segments

Sears is the originator of the global bulk mail order and retail industry, founded in 1886. Until 1992, it maintained its position as the crown of retailing. Its popularity in the U.S. is astounding - an average of 8 out of 10 people in the U.S. shop at Sears at least once a year. The merchandise line that Sears has taken has always been aimed at the lower middle class as the object of consumer appeal. One of its main selling points, like Wal-Mart, is the low price of goods. But after entering the 90s, Sears retail crisis, to 1992 has been only a few decades of history of Wal-Mart to catch up, in order to the survival and development of the company, Sears had to change the business strategy, the attention shifted to the insurance industry, the real estate industry, the financial industry and the credit card industry, to carry out the multi-horizontal operation. So why in the retail industry on the battlefield Wal-Mart was able to win over the dominant position of Sears for many years?

Wal-Mart in the brand management strategy, the choice of a variety of retail formats to target consumers of different grades. It is because of Wal-Mart all-round attack, seize the high and low-grade market, so Wal-Mart replaced the once popular throughout the United States, Sears, became the first brand in the retail industry.

After World War II, the structure of consumers began to change. The original lower-middle class has gradually divided into "upper-middle" and "lower" classes. Wal-Mart for this change, decisively adopted a different form of business brand strategy. Among them, the Sam's Club created in 1983 and the Wal-Mart Shopping Plaza created in 1988 were aimed at the "lower" consumers, more thoroughly to achieve the ideal situation of reducing expenses, and strive for most of the original customers belonging to Sears. Another form of operation created in 1987, Wal-Mart comprehensive department store decoration, large-scale, super service, the sale of a variety of products, unique, compared to the Sears sale of goods are mostly some simple style, the lack of uniqueness, so the "middle and upper" class of customers will no longer be attached to the Sears company. Because Wal-Mart from these two aspects at the same time to challenge Sears, launched an attack, so Sears is unable to compete with it, finally gave up the position of the alliance, to the retail industry outside the industry to go.

Membership is an emerging form of retailing. The Sam's Club was a major feature of Wal-Mart's operations and a major asset in its efforts to capture the market over Sears.

The implementation of membership has brought many benefits to Wal-Mart:

1. The establishment of a long-term stable consumer market. Through the membership system, Wal-Mart in the form of organizational constraints, a large number of unstable consumers into stable households, thereby greatly increasing Wal-Mart's turnover and market share.

2. Cultivate a large number of brand loyalists. Through the membership system, become a member of the consumer will be in the Sam's Club shopping for a long time, so it is easy to create a buying habit, so as to cultivate a sense of consumer loyalty to Wal-Mart as a retailer brand.

3. Dues revenue is considerable. Dues are a small amount relative to the individual, but for a large number of members of the Sam's store, but a considerable amount of income, it is often more than the net profit from sales.

On the other hand, membership is a form of promotion similar to a markdown, from which consumers can derive many benefits, such as:

A Enjoyment of ultra-low price discounts or special services. For consumers, joining a Sam's store can enjoy lower prices, and the one-time expenditure of dues is far less than the super-low price discounts enjoyed on each subsequent purchase, so they are often willing to join a membership store.

B Convenient shopping. Once consumers become members, they can enjoy a variety of special services; for example, they can regularly receive information about the style, performance and price of new arrivals, and enjoy home delivery services.

C The membership card can be used as a gift for friends and family. There are many forms of membership cards, and the supplementary card can be used as a gift to others.

Sam's Club memberships are divided into two categories: business and personal. Applicants for business membership must present a copy of a valid business license and can nominate eight affiliate members; applicants for personal membership must present only their resident identification card or passport and can nominate two affiliate members. The fees for both types of membership are unified, with an annual fee of RMB150 for the main card and RMB50 for each supplementary card (take Shenzhen Sam's Store as an example). The simple membership procedure ensures that every consumer has the possibility to become a member and enjoy the benefits.

Wal-Mart (WAL-MART) small file:

1950 Sam Walton opened the first bargain store.

1962 Walton opened the first Wal-Mart store in Lajos, Arkansas, under the name "WaI-Mart".

1972 Wal-Mart Stores, Inc. lists its stock in New York, and its value doubles 100-fold over the next 17 years (to 1989).

1979 Wal-Mart surpasses $1 billion in total sales for the first time.

1983 Successfully opens Sam's Club, where members can shop at low prices.

1985 Forbes listed Walton as the richest man in America.

1987 The first general merchandise store (HyperMart) opens in Garland, Texas, and establishes one of the largest private satellite communications systems in the U.S., linking subordinate stores to its headquarters.

March 1988 Establishes the first Wal-Mart Affordable Shopping Plaza (Super Center) in Washington, Missouri.

1991 45 Sam's Club stores and Wal-Mart plazas are established in Mexico in partnership with the famous CifaS. A. Another 122 stores are opened in Canada.

March 17, 1992 Walton is awarded the Presidential Medal of Freedom.

1993 Wal-Mart opened 330 retail stores in Britain, France, Germany and other European countries, and its overseas turnover accounted for 27.6 percent of its total turnover.

1994 Formally established the International Business Department, specializing in overseas affairs.

August 12, 1996 China's first Wal-Mart Affordable Shopping Plaza and Sam's Club store opened in Shenzhen.

Sam Walton's Ten Rules of Successful Business:

1. Do business with all your heart and do more than anyone else.

2. Share profits with coworkers.

3. Motivate your coworkers.

4. Communicate with your coworkers about everything.

5. Appreciate your coworkers' contributions to the company.

6. Success should be greatly celebrated, failure is not necessary to lose heart.

7. Listen to everyone in the company.

8. Exceed your customers' expectations and they will come back again and again.

9. Control costs below those of your competitors.

10. Swim against the tide, take a different path, and abandon traditional ideas.