Walmart Marketing Strategy In 2022 (What Is It + More)
As the world‘s largest company by revenue, with over half a trillion dollars annually, Walmart is an undisputed retail giant. But how exactly did Walmart become so massive? A big part of the answer lies in their meticulously crafted marketing strategy.
In this comprehensive guide, I‘ll give you an insider‘s look into Walmart‘s marketing approach. As an experienced ecommerce seller formerly selling on Walmart‘s marketplace, I‘ve seen firsthand how Walmart leverages marketing to stay on top.
From pricing to digital transformation to supply chain mastery, we‘ll uncover what makes Walmart a retail marketing powerhouse.
An Empire Built on EDLP
At the core of Walmart‘s appeal is their EDLP or "everyday low prices" strategy. By offering customers consistently low prices across a broad assortment of products, Walmart builds trust and loyalty.
Shoppers know they can find deals without having to wait for sales or coupons. In 2021, Walmart served over 265 million customers per week worldwide!
But how can they profit while keeping prices so low? It comes down to Walmart‘s immense economy of scale. As the world‘s largest company, they have unrivaled purchasing power with suppliers. By buying in massive volumes, Walmart can negotiate the lowest possible prices from vendors.
Supply chain efficiencies also enable EDLP. Walmart has invested heavily in distribution centers, logistics infrastructure and technology to minimize costs at every link in the chain. For example, Walmart pioneered the use of RFID tags to track inventory in real-time.
According to Walmart, their supply chain innovations have led to over $1 billion in savings annually. These savings can be passed on to customers through markdowns.
While Walmart maintains everyday low prices, they do still run promotions and Rollbacks to drive store traffic and sales. For example, around major holidays and events, Walmart might selectively discount certain items as lost leaders. Dynamic pricing algorithms help determine optimal pricing as well.
Some statistics that demonstrate Walmart‘s supply chain and pricing prowess:
Number 1 on Fortune 500 ranking, with over $573 billion in revenue in 2021
Operates over 11,500 stores worldwide
Fills ~2.1M customer orders daily in the U.S.
Manages inventory of over 4,700 stores from 4 regional distribution centers
Has saved over $1 billion annually through supply chain optimization
Leveraging Digital & Ecommerce
For much of their history, Walmart primarily focused on brick-and-mortar retail. But with the rise of ecommerce giants like Amazon, Walmart has made huge investments to own digital retail as well.
Some of Walmart‘s major digital transformation moves include:
Acquiring Jet.com for $3.3 billion in 2016 to gain expertise in digital retail. Jet’s founder Marc Lore now heads Walmart‘s ecommerce business.
Growing online grocery pickup and delivery with over 3,000 locations currently.
Launching Express Delivery to deliver goods from stores to customers in under 2 hours.
Offering tools for customers to shop seamlessly online and in-store through Walmart app features like Store Maps, Virtual Try-On for makeup, Check Out With Me and more.
Creating proprietary platforms like Walmart Media Group and Walmart Connect to enable sellers to advertise on Walmart‘s website.
Investing billions in acquiring specialty ecommerce brands like Bonobos, Modcloth, Moosejaw and Flipkart.
Growing Walmart+ membership program to over 200 million members with delivery, scan & go and fuel discounts.
Today, Walmart‘s ecommerce sales grew to over $65 billion in 2021, representing over 11% of total revenue. And ecommerce is a major focus area going forward.
According to CEO Doug McMillon, “We’re transforming into a digital enterprise…Investing in technology that enhances the experience.”
Harnessing the Power of Social
Beyond digital commerce, Walmart has fully embraced social media to engage with customers. They boast massive followings on YouTube, Facebook, Instagram and TikTok.
Walmart’s Instagram over 3 million followers, for example, allows them to showcase products and brands through a trusted platform.
User-generated content and influencer marketing attract younger demographics that might not immediately associate with the Walmart brand. The #WalmartChallenge on TikTok generated billions of views.
Around major cultural moments and holidays, Walmart devises creative social campaigns. They partnered with Netflix’s Stranger Things for in-store displays and shoppable livestreams.
According to William White, Walmart’s CMO, “We’re focusing more on reaching customers through the lens of culture.”
The Store Experience
Despite major digital investments, Walmart‘s physical stores remain the heart of their business. Walmart leverages its over 10,000 stores worldwide to deliver convenience, engagement and immersion.
In-store marketing strategies include:
prominent signage and displays to spotlight products
demos and free samples bringing products to life
experiential brand activations making shopping entertaining
localized assortments catering to neighborhood preferences
emerging tech like virtual reality augmented reality enhancing the experience
Store associates are especially critical for delivering customer service and explaining new tech features.
Remodeled stores like Walmart Supercenters provide expanded food, pharmacy and financial service options under one roof.
Even as retail goes increasingly omnichannel, Walmart stores give customers a tangible way to see, touch and feel products.
The Walmart Brand
Through many decades of evolution, Walmart has honed its brand strategy and positioning:
Offer exceptional value – by providing customers consistently low prices that they can rely on.
Provide convenience – as a one-stop shop with broad assortment of merchandise and services.
Local community focus – cater to the needs of the neighborhoods each store serves.
Customer-centricity – develop seamless shopping experiences centered around the customer.
In the face of rising competition from retailers like Amazon, Target and Costco, Walmart has responded by acquiring premium specialty brands like Bonobos, Moosejaw and Modcloth. This expanded their appeal in categories like fashion and outdoors where Walmart previously lagged.
According to Kieran Shanahan, Walmart‘s VP of Marketing, "We want to gain credibility with customers that Walmart may not have been part of their consideration set."
The Importance of Supply Chain Mastery
We’ve touched on Walmart’s supply chain innovations already, but it’s worth diving deeper on why this enables their marketing strategy.
With my background in selling on Walmart’s marketplace, I’ve experienced firsthand the lengths Walmart goes to optimize vendor relations and distribution.
As the world‘s largest company, Walmart wields tremendous negotiating power with suppliers. By purchasing massive volumes, they secure exclusive deals and discounts.
Walmart then passes these cost savings to customers through everyday low pricing.
Just as critical are supply chain technologies pioneered by Walmart like cross docking, RFID inventory tracking, automated distribution centers, etc.
For example, at distribution centers (DCs), cross docking routes shipments directly from suppliers to stores without entering long-term storage. This reduces operational costs significantly.
Meanwhile, RFID tags attached to pallets and cases enable Walmart to track inventory in real-time across the supply chain. This increases efficiency in stocking, picking and delivery.
With logistical mastery spanning air, trucking, railroads and more, Walmart controls costs andminimizes out of stocks. Today, over 90% of Americans live within 10 miles of a Walmart.
Some statistics illustrating Walmart’s vast supply chain:
Operates over 150 distribution facilities worldwide
Has over 9,000 company owned trucks, plus contracts with dedicated fleets
Uses RFID across distribution centers to enable real-time inventory tracking
Reduced out of stocks by over 60% by leveraging supply chain data analytics
The Path Ahead
As consumer needs and competitive forces continue evolving, so too will Walmart’s marketing approach.
They will accelerate their transformation into a seamless omnichannel retailer. Voice-enabled shopping via smart home devices will grow. Personalization powered by artificial intelligence will hyper-target promotions.
Walmart is already piloting cashier-less stores, autonomous delivery drones and other emerging technologies.
Acquiring new capabilities through strategic acquisitions will also continue being key to Walmart’s strategy.
After studying Walmart’s strategies closely as a seller and marketer myself, I’m confident their marketing innovations will keep them atop the retail world for years to come.
In summary, Walmart’s marketing success stems from excelling across the retail marketing mix – value and assortment in their merchandising, convenience and localization in their store footprint, omnichannel capabilities balancing digital with physical, and masterful supply chain management enabling it all.
Walmart sets the standard that all retailers must keep pace with. Their marketing strategy will no doubt remain dynamic and forward-looking to continue delighting customers in an increasingly digital-first retail landscape.
