Do you think Wal-Mart has been successful at converting the shopping experience into a competitive advantage?
I think Wal-Mart has been successful at converting a shopping experience to their advantage. They are the largest retailer in the US and they are still privately owned—so they must be doing something right. Their primary consumer is of a lower SES and seeks value in their products, which is in line with Wal-Mart’s main point of difference—the lowest prices. However, a distinction that isn’t made in their marketing is that they offer the lowest prices on some items, not all items. So while you are saving money for some items, you are losing on others. If you are not a savvy shopper, or are easily distracted by a good deal, you may not notice the more expensive items that make their way into your basket. On the other hand, you may be a savvy shopper, but shop at Wal-Mart because you don’t have to stop at several places to get all the things you need. Wal-Mart uses this consumer problem to their advantage. This was first brought to my attention many years ago, and frequently comes back into conversation, especially around Christmas. My brother-in-law has two children, ages 8 and 4. So the bulk of their Christmas shopping budget is spent on them. My sister-in-law tells me each year about her strategy for getting the best deals on toys, electronics, and clothing for her kids. She is always telling me how she has to be careful because “these places try to lure you in with a really hot item for Christmas” (last year it was some version of a Vtech Reader for my nephew) and “then you end up coming out with a bunch of other expensive stuff you could have probably bought cheaper elsewhere.” But can you put a price on the convenience of a one-stop shop?
Thus, as stated in the article, Wal-Mart’s tactics on tracking items that sell well during certain events or occasions serves them well in that they are able to adjust their pricing strategy. One item that is the lowest priced among competitors gives consumers some sense of value in shopping at Wal-Mart, but the other items that are often purchased together with the lower priced item yield a higher mark-up. So their strategy and use of the data they collect, gives them a competitive advantage, but will hurt most consumers that aren’t watchful to compare prices of other items, or don’t have the time to make trips to other retailers.
What do you think about the privacy issues associated with all of that data and the amount of personally identifiable data they are able to capture? Does it bother you? Do you trust them?
In general, it does bother me a little, and no I don’t trust when retailers ask for information and say it’s only to track where their customers are coming from. I think that especially with Wal-Mart there needs to be a better balance. I believe a “give and take” exchange would better serve Wal-Mart in the long run. For example, Wal-Mart doesn’t offer a loyalty program. As consumers become more knowledgeable of technology that uses their information and aware of the potential privacy risks associated with it, they may begin to oppose Wal-Mart’s practices and refuse to offer their information. If they feel they’re getting nothing in return.
First of all, it’s bothersome to be asked what your zip code is, email address, and other information. Personally, unless they need information for the transaction, I politely refuse to give that information away. But, according to the article, much of the information obtained from customers is information that is not verbally requested—but is required in order to obtain the service they desire and complete the transaction. In a way, consumers are forced to give this information and then it is being used to learn more about their shopping habits. I don’t see how they can legally link your shopping habits to your personal information such as name and address…This seems to me to be a violation of our privacy. An anonymous collection of consumer shopping data is acceptable, but knowing someone’s name, where they live, and how often they buy diapers or frozen food feels like an invasion of privacy.
What aren’t they doing with technology that they could; that is, are they using all of the technology that is available to them to capture insights and create great experiences for their customers and, if not, what could they do?
According to a 2008 Supermarket News article, Wal-Mart has maximized their shopper penetration to 86% of U.S. consumers, and it’s unlikely that the figure will increase. Therefore, Wal-Mart has been using in-store customer research to examine ways to improve the shopping experience for their current consumers. The idea is instead of trying to obtain new customers, they want to get current customers to shop more often and buy more while they are in the store. Wal-Mart is using research to understand how consumers shop in their stores, what their underlying purchasing dynamics are, and are even using a virtual shopping platform to come up with new store layouts. This research has helped them to segment their shoppers. Though the consistent theme for all their shopper segments is that the typical Wal-Mart customer looks for value. But value isn’t everything—according to the research, the store needs to carry the right products at the right time, and in the right location.
I think Wal-Mart is utilizing all the technology they can to find ways to enhance the customer experience. However, one thing that they seem to be leaving out is customer service. Now I am not a typical Wal-Mart customer (I shop at Target). But, occasionally, I have been forced to shop at Wal-Mart when a Target is not available…so I have had shopping experiences there before. When I walk into the store I notice that it’s not particularly stimulating—the in-store format has dull colors and everything looks plain. But what I especially notice is that when I can’t find something (because I’m not a frequent shopper, I don’t know my way around) is that there is never an employee in sight. Because I don’t like to shop at Wal-Mart, I don’t go in with the intention of browsing. I want to make my trip quick. So finding what I’m looking for fast is important, and I often need someone that knows the store to help me out. When I do find an employee, they are usually unfriendly and uninformed. I find myself wasting more time asking an employee because they don’t have the answer than figuring it out for myself. Inevitable, I end up feeling frustrated and the whole experience puts me in a bad mood.
Finding innovative ways to learn about your customer is something Wal-Mart is doing well. But I find it hard to believe that through all of this data collection customer service has never come up as a topic of the customer shopping experience. This seems like an important factor that has been ignored or not effectively addressed, and it doesn’t take fancy virtual platforms or high-tech tracking systems to discover that consumers are unhappy with customer service.
Perhaps they could have a better training program, provide incentives to retain employees longer, and motivate employees to take pride in their careers at Wal-Mart. The employee is the face of the brand and the person that the customer interacts with. The mood they project implies the same of the brand. Does Wal-Mart not care that I have no faith in their employees and can’t rely on them for assistance? Maybe Wal-Mart is hoping that I will overlook the customer service aspect of the shopping experience because their lower price offsets this deficiency. If that’s the case, then they are wrong. I don’t want to shop at a place where a company as successful as Wal-Mart feels that they can make tradeoffs with my shopping experience and still retain my loyalty.
