Walmart

ECommerce :
Omnichannel
Pursuits

Mr. Mehdi Zahaf

02/04/2020

Eya Aysha Bessrour (13474033)

Fatma Rekhis (11111766)
Fattouma Farhat (11115364)
Khouloud Bel Haj Rhouma (09876847)
Nawress Sabri (09717771)
Sara Yahyaoui (15007901)

Tunis Business School

Marketing Channels
 Table of content

Table of content...........................................................................................................................................2

Executive Summary......................................................................................................................................3

Key marketing Issue.....................................................................................................................................4

Walmart’s distribution rationale and strategy.............................................................................................4

Omnichannel Advantages and Drawbacks...................................................................................................4

The extent to which Amazon is a threat to Walmart....................................................................................5

Recommendations and Implementation Plan..............................................................................................6

Appendix......................................................................................................................................................7

2
Executive Summary

As a market leader in the retail industry, Walmart decided to penetrate the ecommerce scene by
acquiring Jet.com in 2016.

By 2018, the retailer settled for an omnichannel strategy which involves in-store shopping, web shopping
with home delivery and web sales with customer pickup. Walmart chose these 3 methods to provide
many options to their customers.

The company has more than 11,000 stores and 157 distribution centers. This ensures availability to the
consumer wherever they may be. This is why reachability is considered as Walmart’s strongest points.
Walmart’s strategy is successful because customers are equipped with a mobile application, a payment
system and a delivery system. In parallel, Walmart is working on innovations by partnering with
companies like Jetbalck and Spatialanad.

Despite, Walmart’s competitor, Amazon’s experience in ecommerce retail, Walmart remained the
biggest retailer in both the US and internationally. This has been proven by several numbers which
outline the successful performance of Walmart. This idea further demonstrates that Amazon isn’t
currently a threat for Walmart.

Walmart is recommended to focus on ecommerce activities with an emphasis on hygienic shipping of

orders. This solution should be implemented in the short-term due to the current COVID-19 crisis. In the
long term, a digital membership card to improve CRM and customer loyalty is recommended. The goal is
to improve customer satisfaction and increase brand loyalty.

As Marc Lore said “When everything goes online, stores die” and since physical stores are integral to
Walmart’s success, an Omnichannel strategy is considered a suitable initiative to maintain Walmart’s
position in the retail market and face the digital challenges the world is experiencing.

3
Key marketing Issue:
In a competitive retail environment, Walmart faces the challenge of creating and implementing a
successful omnichannel strategy in order to compete and achieve company goals.

Walmart’s distribution rationale and strategy:

Walmart has a strong physical presence. It owns 11,718 stores in different countries which makes its
distribution international. This presence facilitates the delivery of products to customers as it is close and
easy to reach. To win a competitive advantage, Walmart, with 157 distribution centers in the US, worked
on providing many distribution options so that customers can choose the suitable method. Also,
Walmart integrated an omnichannel strategy to enhance the flow of distribution and to provide better
services. All of this highlights the fact that customers are the top priority of Walmart. The retailer is doing
whatever it takes to guarantee their satisfaction and to win their loyalty.
Walmart’s distribution strategy showcases its main strong point which is reachability. With the number
of facilities that it has, it can easily deliver products to customers. The company covers multiple flows of
the channel. The retailer keeps flows centralized through mobile applications, a payment system
“Walmart Pay” and late delivery fines for third-party vendors. Finally, Walmart provides multiple delivery
options for customers like Next-day delivery and Curbside Pickup. As for the limitations of this
distribution strategy. Walmart has a restricted third-party vendor policy. The retailer deals with only
thousands of third-party vendors and doesn’t provide many subscription options. Besides, Walmart
offers limited international delivery options. It operates as an ecommerce in 10 countries and customers
have limited choice. Finally, being new in the omnichannel scene compared to competitors provides
limitations to ecommerce delivery channels. Walmart’s distribution strategy is improving overtime due
to efforts made to leverage the current assets and invest in technology. The company has a great
foundation of capital resources. It is investing in technology to improve distribution performance.

Omnichannel Advantages and Drawbacks:

Today’s customers interact with products not only through physical stores but simultaneously through
mobile phones and websites. Hence, Walmart’s omnichannel strategy allows it to reach a wider range of
customers with different characteristics and shopping preferences. Also, omnichannel allows Walmart to
keep up to date with shopping trends and meet the high demand for omnichannel shopping experience.

4
This is because omnichannel shoppers account for 27% of all retail sales. With a strong omnichannel
strategy Walmart can get ahead of competition, especially with the acquisition of jet.com which allows
for a stronger ecommerce strategy and a better understanding of customer behavior by having access to
shoppers’ history and data.
The drawbacks of having an omnichannel strategy are the high competition in terms of product
selection, shipping costs and delivery time. These are the main challenges faced by Walmart in logistics
and distribution after entering the ecommerce world. The complexity of the management of the first
party inventory creates a need for comprehensive studies and a core of competence. Finally, under an
omnichannel strategy, it is difficult to provide customer satisfaction.

The extent to which Amazon is a threat to Walmart

In 2018, Amazon had 13 times the online retail sales of Walmart which indicates that customers tend to
choose Amazon over Walmart in this area. In addition, Amazon was valued for $1 trillion, while Walmart
$282 billion. This indicates that Amazon is still the choice for customers, even after Walmart joining the
ecommerce sector. The customer orientation to Amazon is explained by Amazon having 6 times as many
SKUs as Walmart.
Despite great threat, Walmart remained the leader of grocery retailers in the US. Grocery sales for
Walmart were almost 6 times the sales of Amazon in 2018. Besides, Walmart has a promising online
growth rate. Even though Amazon has a wider experience in the online retail industry, Walmart had a
growth rate of 13.5% in 2018 and it kept increasing. In addition, by investing in its grocery delivery
service, Walmart succeeded in diminishing the delivery cost and adding more traffic to its stores.
Walmart's introduction of the “unlimited” grocery delivery represents an important competitive
advantage. This allows to conclude that Amazon doesn't represent an immediate threat for Walmart.

 Recommendations and Implementation Plan: 

Short-term Recommendation: 
Focus on ecommerce activities with an emphasis on hygienic shipping of orders. 
Analysis of Recommendation:
Under the current COVID-19 crisis, Walmart should focus on strengthening its ecommerce activity. The
virus outbreak has created a new Service Output Demand (SOD) for the consumer which is the “degree
of hygiene”. SODs such as “bulk breaking” and “spatial convenience” are of higher importance. A higher
need to stock up on goods and make orders without leaving home. Walmart can deliver these SODs since

5
it has a preset foundation. The challenge is, on one hand, to upgrade the level of hygienic precautions in
facilities. On the other hand, Walmart should be able to handle the rise in delivery requests.

Action Point Who When

Increase hygiene standards throughout Walmart: Inventory/Delivery station By the end of

- Managers will provide safety suits for workers. managers. this week.
- Machines and products will be sprayed by disinfectant.

Promote high hygiene standards and invite customers to Marketing department. Within 1 week.
order from home.

Increase shipping capacity by covering more places and Logistics managers. Within 2
possibly partnering with shipping companies. weeks.

Long-term Recommendation: 
Create a digital membership card to improve CRM and customer loyalty.
Analysis of the recommendation: 
Walmart’s ecommerce goal is to focus on enhancing the customer’s experience. A comprehensive loyalty
program that helps in engaging Walmart’s and the competitors’ customers to live a new experience is
suggested. They would enjoy new features such as on-time delivery, coupon cards, loyalty subscription
programs, daily discounts, pickup facilities, etc. The main purpose of this project is to improve
customers’ satisfaction and gain better brand positioning. 

Action Point Who When

Setting up the CRM includes the creation of the database of loyal Sales In 6
customers that are targeted to join the program.  department. months.

Launching the membership cards after designing, assigning features and Marketing In 1 year.
utilities, fitting the card with Walmart Pay and Walmart applications.  department.

Marketing the campaign. In 1 year.

6
Appendix

Table 1: SWOT Analysis of Walmart's Omnichannel Strategy

Strengths:    Weaknesses:   
- Walmart is the largest retailer in the - Walmart’s limited focus on innovation.  
US. - Challenges in logistics and distribution
- The international presence of strategies after entering the e-
Walmart.   commerce.
- Many stores that facilitate the reach to
customers.  

Opportunities:    Threats:  
- Expansion to other countries.   - Intense competition from other
- Improving the delivery system.   retailers especially in e-commerce. 
- Investing in technology to enhance its - Lack of international delivery options.
distribution performance.   - Distribution channels are developing
rapidly and it’s a challenge to keep up.
- With a growing demand for online
shopping, Walmart’s physical stores
could become obsolete.