In the time when digital mediums have to billions of hands, it has become essential for the firms to take the routes of e-commerce. It is seen that companies such as Walmart which was known for its Brick and Mortar kind of business has added online platforms through which they are doing their business. Walmart Inc. is a multinational retail company from America that has large numbers of supermarkets, grocery stores and discount department stores (Walmart, 2019). Due to adoption of digital business, new market strategies, revenue models, business models, value prepositions have to be applied so as to target their market segment. This can be done by analysing the environment for business. This report will highlight the case of Walmart while concentrating on the different aspects of their e-commerce business. It also provides the industry analysis in terms of environment.
This American based company is highly successful in the retail business. It is operating with more than 11,348 stores which are operational in more than 27 nations under the 55 different brand names. This company is world’s largest company in terms of revenue with more than US$500 billion and it has more than 2.3 million employees. This company has come into the e-commerce business in the year 2007 by launching its website Walmart.com (Matusitz and Reyers, 2010). This was a site to store service that enabled consumers to do purchase by online mediums and picking up merchandises in stores. In very few years of time, this company has been able to make huge amounts of profits from its business. With the help of business processes such as Walmart Pay and addition of online retailers such as Jet.com, this company’s online market has boosted up incredibly. With so many online acquisitions in different parts Walmart is now able to sale high amount of their products through this medium at the worldwide level. Best example in this regards is purchase of Flipkart which has made it an valuable player in the Indian market.
In ecommerce business, there are different kinds of strategies and approaches being used by the company. Some of the features of Walmart’s e-commerce are:
Strategy/ Approach: Walmart is committed towards providing the best experience to its customers. For this, they have adopted different set of strategies. This company is acquiring digital brands that are resonating with the shoppers of younger age. For reaching to new customers in new destinations, this company has hired local retailer companies. Some of the famous digital brand that has been acquired by Flipkart is Jet, Shoebuy, Bonobos, Bare Necessities, Moosejaw, Eloquii etc. As a part of their ecommerce strategy, this company has reinvented its apparel offering. Celebrity Brands & Private Labels is another strategy used by them where they have did partnership with celebrities such as Ellen DeGeneres and Elizabeth Stewart (Chuang, et al. 2011). They have improved their supply chain management so that products are available in the near most warehouses. This has become essential for improving the speed with which they deliver their products.
Value propositions: Walmart’s value proposition is defined through its innovative thinking. They have a commitment to save the money of their consumers; they have planned their services in such as a manner that they have become leader in the way they do their business. Their ecommerce value is being supported by supply chain management where they ensure timely delivery of the products. With the advancement in the online technologies, this value proposition has gone to higher levels (Stankevi?i?t?, Grunda and Bartkus, 2012).
Revenue model: Currently this company is generating 3% of its total revenue from their e-commerce platform. There primary source of sales is their brick and mortar business but in the years to come, this value is going to increase considerably. Most of their sales are done by their website Walmart.com while sales are also made through Apps and third party sites such as Jet.com, Flipkart and many other sites that they have acquired (Rogers and Makonnen, 2014).
Target markets: Target market of this company is very huge. They sell all the type of commodities for every segment in the society. Since they offer products at relatively lower prices hence they can target people from all the classes of the society from any occupation. They have targeted people between the age group of 14-65 years as they are doing different types of purchase. People who seek cost advantage or are cost conscious are highly targeted by the company (Bonanno and Goetz, 2012).
Business model: Walmart’s business model is highly advanced. They have large numbers of customer segments and they have their segments on the basis of different kinds of variables. Multiple demographics are their segments. Value proposition is provided by its competitive pricing, multiple sales network, accessibility, flexibility as well as its domestic and international reach. There are several digital channels that they utilise for doing the sales. Customer relationship has been their priority for which they are using their digital mediums effectively (Etail, 2018). Their key activities selling of retail products. At the same time their key partners include suppliers and sourcing partners, marketing and affiliate partners, channel and joint partners, strategic and alliance partners. Their key resources include intellectual property, mobile platforms, advanced technologies, their partners and personals. It also includes their trademarks and patents. Their cost structure suggests that their cost remains on the lower side. Its revenue stream includes products from different categories i.e. grocery, health and wellness, Entertainment, Hardlines, Apparel and home products.
Ecommerce marketing strategies: There are different types of ecommerce marketing strategies that are being used by Walmart. These strategies include content marketing, social media marketing, website optimisation techniques, search engine optimisation, app based marketing, pay-per-click marketing. In this search engine optimisation and App based services are the two major strategies being used by the company (Zhang, et al. 2010).
Online retail industry has grown widely and it has become essential for the organisations to ensure that they are competitive in the market (Laudon and Traver, 2013). Most of the companies are taking online mediums so as to do maximum sales. In 2017, the worldwide sale through online mediums was around 2.3 trillion dollars which is expected to reach to 4.88 trillion US dollars in 2021.
The growth of the industry is projected to remain high. Alone the data from China suggests that 19% of their retail sales are done through online mediums and mainly through mobile devices. In the broader context it is seen that almost all the company irrespective of the industry is selling their products through e-commerce market (Watson, 2011). In future which the increase in the speed and bandwith of the online technologies, it is expected that large numbers of people are going to get connected with these technology. It increases the scope of the Walmart to do better ecommerce business.
Walmart has wide range and numbers of stakeholders attached with it. Their stakeholder’s group include investors, Customers, Employees and Suppliers. Investors and customers have been their priority. This is because this company is aiming to become the leader in the e-commerce market also which is not possible without doing lots of acquisitions (Cheng, 2018). In their strategies, role of investors is very high and hence they are paying attention to their benefits. Strategies are made checking the benefits that stakeholders want to achieve. They also have different kind of benefit programs for employees which help them in achieving higher employee satisfaction. They also give supplier free hand hence it helps the firm in maintaining the supply and demand balance. For Walmart it is crucial to manage the support from suppliers. This is because it helps them in enhancing the pace of their business operations.
It is essential for any organisation to do industry analysis as it enables the firms to do analyse the way in which they need to transform their business process so as to achieve success. Industry analysis suggests about the trends in the market at the same it tells about the opportunities and threats present in the market. In the industry analysis porters analysis can be analysed.
It is also crucial that company understands its internal and external environment so as to understand their capabilities to deal with the challenges they are facing.
Strengths
Weakness
Opportunities
Threats
Some of the issues that can be identified are:
On the basis of the issues that has been analysed in the above part of the report, it is recommended that Walmart need to invest a huge amount of money in the technological advancements at regular basis. Company must focus on the technologies such as artificial intelligence that is seriously backed by data they have collected in over the years. It is also recommended that this company do aggressive online marketing so as to increase their brand presence in the ecommerce market (Michelson, et al. 2018). In order to ensure customer loyalty company must provide some kind of discounts and loyalty cards. Walmart needs to make quick adjustments in the supply chain so that they can be ready for the increasing ecommerce demands.
References
Bonanno, A. and Goetz, S.J., 2012. Walmart and local economic development: A survey. Economic Development Quarterly, 26(4), pp.285-297.
Brown, J.R. and Dant, R.P., 2014. The role of e-commerce in multi-channel marketing strategy. In Handbook of Strategic E-Business Management (pp. 467-487). Springer, Berlin, Heidelberg.
Cheng, A. 2018. Walmart’s E-commerce Tactics Against Amazon Look To Be Paying Off. [Online] Available at: https://www.forbes.com/sites/andriacheng/2018/08/16/walmarts-ecommerce-tactic-against-amazon-is-paying-off/#5b66912fb74d. [Accessed on 21st March 2019]
Chuang, M.L., Donegan, J.J., Ganon, M.W. and Wei, K., 2011. Walmart and Carrefour experiences in China: resolving the structural paradox. Cross Cultural Management: An International Journal, 18(4), pp.443-463.
Curty, R.G. and Zhang, P., 2013. Website features that gave rise to social commerce: a historical analysis. Electronic commerce research and applications, 12(4), pp.260-279.
Etail, 2018. Here’s How Walmart has Rebranded its Ecommerce Platform to be the Anti-Amazon. [Online] Available at: https://etailwest.wbresearch.com/walmart-rebranded-ecommerce-platform-strategy-anti-amazon-ty-u. [Accessed on 21st March 2019]
Laudon, K.C. and Traver, C.G., 2013. E-Commerce 2014: Business, Technology.10th ed. London: Pearson.
Matusitz, J. and Reyers, A., 2010. A behemoth in India: Walmart and glocalisation. South Asia Research, 30(3), pp.233-252.
Michelson, H., Boucher, S., Cheng, X., Huang, J. and Jia, X., 2018. Connecting supermarkets and farms: the role of intermediaries in Walmart China’s fresh produce supply chains. Renewable Agriculture and Food Systems, 33(1), pp.47-59.
Mohapatra, S., 2013. E-commerce Strategy. In E-Commerce Strategy (pp. 155-171). Springer, Boston, MA.
Nudelman, G., 2011. Designing search: UX strategies for ecommerce success. John Wiley & Sons.
Peters, M.L. and Zelewski, S., 2013. Competitive strategies their relevance for sustainable development in the food industry. J. Mgmt. & Sustainability, 3, p.148.
Rogers, S. and Makonnen, R., 2014. Entrepreneurial finance: Finance and business strategies for the serious entrepreneur. New York: McGraw-Hill Education.
Stankevi?i?t?, E., Grunda, R. and Bartkus, E.V., 2012. Pursuing a cost leadership strategy and business sustainability objectives: Walmart case study. Economics and Management, 17(3), pp.1200-1206.
Thomas, L. 2018. Walmart has big year of e-commerce investments planned to bring growth back to 40 percent. [Online] Available at: https://www.cnbc.com/2018/02/20/walmart-has-big-year-of-e-commerce-investments-planned.html. [Accessed on 21st March 2019]
Tsai, J.Y., Raghu, T.S. and Shao, B.B., 2013. Information systems and technology sourcing strategies of e-Retailers for value chain enablement. Journal of Operations Management, 31(6), pp.345-362.
Walmart, 2019. Ecommerce. [Online] Available at: https://corporate.walmart.com/galleries/ecommerce. [Accessed on 21st March 2019]
Wang, X. and Ren, Z.J., 2012. How to Compete in Chinas E-Commerce Market. MIT Sloan Management Review, 54(1), p.17.
Watson, B.C., 2011. Barcode empires: politics, digital technology, and comparative retail firm strategies. Journal of industry, competition and trade, 11(3), pp.309-324.
Zhang, J., Farris, P.W., Irvin, J.W., Kushwaha, T., Steenburgh, T.J. and Weitz, B.A., 2010. Crafting integrated multichannel retailing strategies. Journal of Interactive Marketing, 24(2), pp.168-180.
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