Walmart is a $611 Billion Retailer Giant

Do you remember that feeling when you walk into Walmart 😃 and feel like a whole world under one roof? Groceries, clothes, electronics - they have got everything.

I know, we walk into a Walmart, planning to grab just one thing, and suddenly find ourselves pushing a cart full of stuff 😣 we did not need.

But what amazes me is how they have taken that same experience and brought it online. It's like magic – one click, and boom, your groceries are at your doorstep.

So, how did this once a single store in Arkansas dominate the global market today?

Let's see!

Walmart, founded by Sam Walton in 1962, has grown from a discount store in Arkansas to the world’s largest retailer, with over 10,500 stores across 24 countries and annual revenues exceeding $611 billion in 2023.

Walmart’s presence is so vast that 90% of Americans live within 10 miles of a Walmart store. The brand built a loyal customer base by providing value, convenience, and variety.

However, as competition from e-commerce giants like Amazon and traditional rivals like Target strengthened, Walmart has had to evolve.

Over the years, Walmart has changed its business model by adopting several things to meet the growing customer demands and stay competitive.

But before, what do you think is the cheapest product in Walmart? Here’s a cool YouTube shot I came across where 2 members hunt for the cheapest product in Walmart:

Brand Strategy

Walmart's brand strategy has been the cornerstone of its success for decades and evolves as the retail landscape shifts.

At the heart of this strategy is the company’s commitment to Everyday Low Prices (EDLP), a fundamental principle since the company’s inception. However, Walmart's strategy now goes far beyond the lowest prices.

Everyday Low Prices (EDLP)

Walmart’s pricing strategy revolves around providing customers with consistently low prices rather than temporary sales or promotions. This approach builds customer trust and loyalty because shoppers can count on Walmart for affordable products without chasing deals.

Walmart's pricing is generally 8-10% lower than competitors, which attracts cost-conscious shoppers. Over 80% of Walmart customers cite low prices as the main reason for their loyalty to the brand.

For example, here’s a receipt comparison between Walmart and Target for the same products:

E-Commerce and Omnichannel Integration

As shopping habits shift toward digital, Walmart has adapted by integrating online and in-store experiences. This omnichannel strategy allows customers to choose how they shop, with services like Buy Online, Pick Up in-store (BOPIS), and Grocery Delivery.

Walmart’s investment in technology ensures that the customer journey is smooth across both physical and digital channels. In 2023, Walmart’s e-commerce platform generated $105 billion, a 12% increase from 2022.

And the Walmart App has over 50 million active users, with features that include scanning items in-store for faster checkout and reordering past purchases.

Walmart+ Membership Program

Walmart+ launched in 2020, is Walmart’s answer to Amazon Prime to provide a subscription-based model that gives free delivery, fuel discounts, and shopping deals.

The goal is to boost customer loyalty by providing additional value beyond low prices. By 2023, Walmart+ had over 11 million members with subscribers spending 30% more than non-subscribers, largely due to the convenience of free delivery.

Sustainability

Walmart has positioned itself as a leader in corporate sustainability, setting goals to reduce its environmental impact. The company aims to attract eco-conscious consumers while maintaining long-term operational efficiency.

Walmart has committed to reaching zero emissions by 2040 and sourcing 100% renewable energy by 2035. Walmart’s sustainable product line, Project Gigaton, has already stopped over 500 million metric tons of carbon emissions from its supply chain.

Here’s a short clip about the Project Gigaton:

Private Labels and Exclusive Brands

Walmart has expanded its focus on private labels and exclusive brands like Great Value, Equate, and Sam’s Choice. These in-house brands allow Walmart control over pricing and product quality, further enhancing its customer's value proposition.

Walmart’s private-label brands account for 25% of its total revenue. Products from Walmart’s private labels are 20-30% cheaper than national brands, contributing to the company's competitive edge.

Here’s a clip by one of Walmart’s loyal customers displaying Great Value products:

Local and International Market Personalization

Walmart adjusts its inventory based on local demographics and preferences. For instance, stores in urban areas stock smaller-sized products, while more bulk items in rural areas.

Internationally, Walmart modifies its product offerings to address local tastes. Walmart is present in 24 countries and has customized strategies for each region.

For example: In India, Walmart runs through its subsidiary, Flipkart, one of the country's largest e-commerce platforms, giving Walmart a foothold in the Indian retail market.

Here’s a video Walmart Chennai made to let people know about work opportunities 2 years ago:

Competitor Analysis

Walmart runs in a highly competitive retail environment, with Amazon and Target being its most influential competitors. While all three companies serve the retail market, their strategies, strengths, and focus areas vary.

Understanding how Walmart stacks up against its competitors sheds light on how the brand has managed to stay ahead in physical retail and e-commerce.

1. Amazon

Amazon is Walmart’s primary competitor, especially in the e-commerce space. With its vast online marketplace and authority in cloud computing services, Amazon has redefined how people shop.

However, Amazon's key strength, when it comes to e-commerce, lies in its vast product selection and excellent logistics network. Its Prime membership program has 200 million members worldwide and offers free two-day shipping, video streaming, and other perks.

In contrast, Walmart’s e-commerce business, though rapidly growing, still lags behind Amazon in market share. Yet, Walmart has a noteworthy advantage in brick-and-mortar stores, something Amazon lacks.

As of 2023, 90% of Americans live within 10 miles of a Walmart store, giving Walmart a unique edge with its omnichannel approach, allowing customers to shop in-store and online.

Walmart’s recent push with Walmart+ aims to compete directly with Amazon Prime by offering similar benefits but with an added focus on grocery delivery, an area where Walmart excels.

While Amazon is far ahead in the online retail industry, Walmart’s physical presence gives it an added advantage in omnichannel retail, especially in groceries and same-day delivery.

Here’s a video explaining the benefits of Amazon Prime and Walmart+ and how they are playing their roles to stay competitive:

2. Target

Target, while smaller in revenue, positions itself differently from both Walmart and Amazon by focusing on a higher-end shopping experience and targeting a more wealthy customer base.

It has built a loyal following, especially among urban millennials, through exclusive designer collaborations, stylish private-label products, and a more refined in-store experience.

What makes Target even more attractive is product curation and customer loyalty. Its Target Circle loyalty program, with over 120 million members, has been a key driver of its recent growth.

Additionally, its investment in same-day services like Order Pickup and Drive Up has made it a favorite among customers seeking convenience without sacrificing quality.

However, Target’s smaller store footprint, around 1,950 stores in the U.S., and its limited international presence hinder its ability to compete with Walmart’s global reach and sheer volume.

While Walmart serves a broader customer demographic with its low prices, Target attracts customers willing to pay a premium for better quality and exclusivity.

Target merges style with affordability, but Walmart’s massive scale and price competitiveness give it the upper hand in attracting cost-conscious shoppers.

Despite these differences, both brands grow by focusing on their respective strengths. Check this video out to see if Target is expensive compared to Walmart:

3. Costco

Another notable competitor is Costco, which works under a membership-only warehouse model. Costco’s key selling point is bulk purchasing at discounted rates, targeting families and small businesses looking for value.

Although Costco has a small in-store count with around 850 warehouses, they are known for its high customer retention rate. It is because of its focus on limited product selection, low operating costs, and high-quality private-label products under the Kirkland Signature brand.

Costco’s membership model is its primary strength, with over 125 million members who renew at a 90% rate globally. In contrast to Walmart’s focus on a broad product offering, Costco’s business model thrives on offering fewer SKUs at lower prices.

While Costco’s product range is limited compared to Walmart’s, its bulk pricing and strong member loyalty help drive high revenue per customer.

Costco’s efficient model thrives in a niche that Walmart has only partially tapped into. However, Walmart’s broader product range and optional membership model attract a more diverse customer base.

However, I heard that American families love Costco. Is that true? Check this video:

Results

• Walmart's overall revenue in 2023 reached $611 billion, making it the largest retailer globally and Walmart’s e-commerce revenue hit $105 billion in 2023, accounting for 13% of total sales.

• Walmart's online sales surged by 79% in 2020 and have maintained double-digit growth, and over 70% of online shoppers used Walmart’s Grocery Pickup and Delivery services in 2023.

• In 2023, Walmart maintained its position as the number-one grocery retailer in the U.S., with a market share of 24%.

• As of 2023, Walmart+ has over 11 million subscribers in the U.S. Walmart+ members tend to spend 30% more than non-members, largely because of the convenience.

• Walmart’s Project Gigaton aims to remove 1 gigaton (1 billion metric tons) of greenhouse gases from its supply chain by 2030. It had already achieved over 500 million metric tons by 2023.

Conclusion

Walmart's success lies in its ability to blend low prices, omnichannel strategies, and digital innovation. By leading in the grocery sector, expanding its e-commerce presence, and concentrating on sustainability, Walmart maintains a competitive edge.

Its initiatives like Walmart+ and Project Gigaton attract diverse customers while boosting revenue. Walmart’s agility in adapting to market shifts ensures its continued dominance in the global retail space.

Now, we would want you to try answering these:

1. How can you design a loyalty program that drives engagement and increases customer retention?

2. How will you adapt your marketing strategies to stay ahead of emerging trends and shifting consumer behaviors?