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Blog Summary:
This blog examines Walmart’s business model and explores various reasons for its success. Whether you wish to explore facts about Walmart, its revenue sources, business model, or SWOT analysis, we have covered everything. We also discuss why any business should develop an app, like Walmart, to achieve success.
Table of Content
In today’s highly dynamic retail landscape, caused by changing customer preferences and technology advancements, Walmart emerges as a stalwart. Thanks to its innovative, unique, and cost-leadership approach. Walmart Business Model works on the philosophy of serving customers with unbeatable deals.
Walmart has transformed the way retail businesses improve their supply chain efficiency, approach pricing, and enhance customer satisfaction. It has revolutionized this sector with robust technology, a vast supply chain, and a great commitment to efficiency. Its business model emphasizes combining physical stores and a web presence to cater to the diverse range of customer needs.
We provide comprehensive information regarding Walmart’s business model, including many key factors that contribute to its success. So, let’s read the entire post.
Headquartered in Arkansas, USA, Walmart, established in 1962, is one of the world’s most famous retail brands. The company delivers its services in nearly 19 countries, operating 10,750 stores under various banners.
Walmart offers a range of products at highly affordable prices, including clothing, groceries, household items, and electronics. It caters to several customers regularly through leading eCommerce platforms and physical stores.
The company has a highly efficient supply chain management system, along with a commitment to offering products at the lowest prices and implementing a bulk purchasing strategy.
It is committed to making continuous efforts in automation, digital innovation, sustainability, and other areas to stay competitive in the rapidly changing retail landscape. Walmart holds its position as a top-rated retailer globally.
Now, let’s explore various important facts about Walmart by going through the following table;
| Key Fact | Details |
|---|---|
| Company Name | Walmart Inc. |
| Founder | Sam Walton |
| CEO | Doug McMillon |
| Headquarter | Bentonville, Arkansas, United States |
| Year of Establishment | 1962 |
| Number of Employees | More than 2.1 million (FY 2024) |
| Annual Revenue | $681 billion (Latest Fiscal Year 2024) |
| Profit/Net Income | $16.3 billion (Fiscal Year 2024) |
Walmart is a leading retailer that operates on a cost-leadership business model and is committed to offering products at extremely affordable prices. It operates with the help of a vast network of physical stores and an increasing e-commerce platform. It purchases products in large volumes directly from manufacturers, which allows price negotiation that minimizes costs.
Whether it is in-house logistics, supply chain management, or robust inventory systems, many important factors support Walmart’s operations. It serves a vast customer base through electronics, groceries, apparel, and other products. In addition, the company also harnesses the potential advantages of data analytics and technology for pricing, personalized marketing, inventory control, and more.
As far as Walmart’s business model is concerned, it’s centered mainly around higher-volume, low-margin sales. So, it earns money mainly through two methods, which are as follows:
The majority of Walmart’s revenue is generated through product sales across a range of categories; groceries are the largest contributors to this revenue. Grocery items make up almost half of the overall sales in the US segment.
The company utilizes its global supply chain and economies of scale to offer competitive prices. These enable organizations to capture the attention of most of their customers on online platforms and in many physical stores.
Whether it’s Equate or Great Value, many private label brands of Walmart also play a leading role in increasing its margin with affordable product strategies. Walmart operates in multiple formats, including Sam’s Club, Walmart Supercenters, and eCommerce platforms.
Additionally, its global operations in countries such as Canada, Chile, Mexico, and others also significantly contribute to its product revenues.
Walmart also earns revenue through its services, which is a smaller proportion of its overall revenue. It offers a range of services and generates revenue. Some of its core services include financial services, health services, subscription services, tech, and installation services.
Walmart offers a variety of financial services, including check cashing, money transfer, and bill payment, through its Walmart Money Centers. Apart from this, it also provides a range of health services.
These include dental, medical, and mental health services in many selected locations. Walmart also serves customers by providing home installation services for many electronic items.
As we already described, Walmart’s business model is based on providing more value to customers at the best possible, lowest prices. We present here a complete breakdown of its business model canvas:
Walmart caters to customers from diverse backgrounds, geographies, income levels, and product needs. The following are the major customer segments:
Walmart targets a large percentage of the audience by offering a diverse range of products, from electronics to groceries.
When it comes to Walmart’s value proposition, it revolves around “Everyday Low Prices” (EDLP). Affordability and convenience are the consistent values, making it a perfect choice for millions of people. Its major offerings include:
Walmart leverages various channel distribution systems to maximize its overall reach among its target customers and sell products. The omnichannel approach provides customer accessibility, whether online or in-store. The following are some of them:
Walmart enhances brand loyalty by combining high-touch services in stores with low-friction digital experiences. It focuses on creating customer relations in several ways:
Walmart’s revenue is not limited to a single source, but rather multiple sources, which we have already mentioned. The major benefit of multiple sources of revenue is that they minimize dependency on a single source. Let’s have some of the major Walmart revenue streams:
The success of Walmart depends on its important resources. These resources are as follows:
Walmart maintains its operations with a proper strategy and also by performing various activities, which are as follows:
To enhance its competitive position and increase its power, Walmart made strategic acquisitions in numerous countries worldwide. These acquisitions indicate Walmart’s actual strategy to enhance its overall digital footprint and diversify its offerings.
Some of its major acquisitions include:
Walmart collaborates effectively with many partners to operate smoothly. The following are some of the major partners;
The retail industry is indeed highly competitive, and thus, Walmart faces stiff competition from many leading market players on the same horizon. The following are some of them;
When it comes to Walmart’s cost structure, maintaining scale and efficiency is crucial. Explore varieties of cost structures as follows:
Building an app like Walmart’s is a strategic move for any retailer seeking to expand its global reach and create multiple revenue streams. We will discuss several other reasons why it’s essential to develop this app:
Walmart enjoys its global presence not only through its physical stores but also through its digital platforms. Developing an app like Walmart allows your retail business to break into different geographical boundaries, serving customers worldwide. The major advantage of globalization is it increases demand for cross-border shopping.
Whether it’s multilingual support, real-time product discovery, tailored logistics, or local payment integration, a mobile app unlocks possibilities for everything. This global reach is necessary to tap into emerging markets and thus scale operations with higher efficiency.
Following the pandemic, the e-commerce industry experienced a significant surge. The majority of consumers have recently been turning to mobile devices for their day-to-day purchases. Walmart has also benefited from this trend by providing a seamless shopping experience through its app.
Businesses can easily keep up with the rising wave of e-commerce by creating a similar app. Apart from this, major features such as push notifications for deals, one-click checkout, flexible delivery options, and more match customers’ expectations. They also increase conversion rates.
Walmart has a vast inventory that includes a wide range of products, from groceries and clothing to electronics and pharmaceutical items. When you adopt this Walmart business strategy for your company, it enables you to offer a comprehensive shopping experience to your customers.
It increases everything, whether it’s customer retention or average order value. It’s crucial to craft an app that supports various categories, offers inventory management tools, and provides personalized recommendations. It enables you to work with improved efficiency while matching the multiple needs of customers.
Convenience and ease of accessibility are some major features of the Walmart app. It facilitates users to browse, gather product details, compare costs, place orders, track, etc. They can even reorder the items that are purchased most frequently. This level of convenience is more effective in boosting brand loyalty and customer satisfaction.
For businesses, creating apps with the above features indeed offers a competitive edge, as it allows customers to handle the shopping process. Apart from this, accessibility features such as easy navigation, voice search, and location-based services also improve usability for many demographics.
Walmart app can gather user data, whether it’s browsing patterns or purchase history. These insights are highly important for chalking out custom market strategies tailored to match specific needs. Additionally, they are also vital for various purposes, including forecasting trends, optimizing inventory, and more.
Integrating AI-based analytics into your app provides a detailed understanding of customer behavior. You can also personalize the shopping experience for your customers and make informed decisions based on the data. It transforms your application into a complete strategic tool rather than just a sales platform.
When it comes to trust, it’s considered one of the most important factors that ensure the success of digital retail. Walmart has a strong market reputation for offering a wide range of products that meet customer expectations, including affordability, quality, and reliability.
Of course, no new app can have this level of brand reputation. A highly secure, well-designed, and transparent app is crucial for building trust over time. Your app can establish a powerful brand presence by offering user-friendly features, consistent service, and effective customer support.
Walmart possesses enormous expertise in combining online and offline experiences by using its app. It facilitates users to shop online and pick up in-store. They can scan those items in-store and pay online. This approach is more effective in enhancing customer engagement and operational efficiency.
Apart from features such as smart recommendations, AI chatbots, digital wallets, and loyalty integration, these play a vital role in determining the overall user experience. Implementing the latest tech trends in your app ensures its future readiness and competitiveness.
Getting a SWOT analysis of Walmart helps you explore details about internal and external factors that create challenges and opportunities for this brand. Let’s delve into it:
The major strength of Walmart lies primarily in its immense global popularity and its larger scale of operations. With more than 10,000 stores across the world and a robust e-commerce presence,
Walmart has an outstanding market penetration and buying capacity, which enables it to offer highly competitive prices. It comes with unmatched logistics infrastructure and supply chain efficiency, ensuring consistent inventory management and, consequently, cost savings.
Additionally, it benefits from a range of products that entice customers regularly.
Like some other businesses, Walmart also has some weaknesses. Since it offers products at possibly the lowest prices possible, its profit margin is very low. It thus faces significant challenges to its survival, especially in situations like an economic downturn.
Additionally, the company faces significant criticism over its labor practices, employee wages, environmental impact, and other issues. These all affect the public image. Apart from this, its dependence on the US market maximizes its intention to adapt to domestic economic shifts.
Walmart gets an ocean of opportunities to grow, especially in countries like Brazil and others, with the help of global expansion in emerging markets. The immense digital and e-commerce transformation presents opportunities to enhance online operations and compete with top market players, including Amazon.
Walmart also endeavors to utilize AI-based retail technologies, renewable energy, and sustainability initiatives to enhance operational efficiency and appeal to eco-conscious consumers. It discovers various new opportunities in healthcare and financial services by offering related services.
As mentioned, leading e-commerce giants such as Amazon and others are significant competitors of Walmart. Besides, there are frequent changes in consumer preferences, specifically a significant shift towards online shopping. It requires a fast adaptation. Whether it is supply chain disruptions, economic instability, or regulatory pressures, various factors also contribute to creating threats to Walmart’s global operations.
From app development to business model design, we provide end-to-end solutions for building high-performing eCommerce platforms like Walmart.
Walmart sets a major benchmark in the retail sector through its omnichannel strategy, offering a diverse range of products, data-driven operations, and more. Businesses seeking to create the same ecosystem can get in touch with Moon Technolabs.
We have unmatched expertise when it comes to eCommerce app development. Get in touch with us to turn your vision into life with the assurance of higher efficiency and global reach to unlock huge growth opportunities.
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Jayanti Katariya is the CEO of Moon Technolabs, a fast-growing IT solutions provider, with 18+ years of experience in the industry. Passionate about developing creative apps from a young age, he pursued an engineering degree to further this interest. Under his leadership, Moon Technolabs has helped numerous brands establish their online presence and he has also launched an invoicing software that assists businesses to streamline their financial operations.
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