Wal-Mart Stores: Customer Satisfaction guaranteed!

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Wal-Mart has become a textbook example of managing rapid growth without losing sight of company´s basic values - in Wal-Mart´s case, the basic value was, and is, customer service By Faryal Virk

Wal-Mart StoresWal-Mart has become a textbook example of managing rapid growth without losing sight of company´s basic values – in Wal-Mart´s case, the basic value was, and is, customer service

By Faryal Virk

Imagine a store where you can get everything you need. A one-stop shop where you can get your weekly groceries, have the car oil changed, pick up the kids’ school supplies, and while you are waiting to have a prescription filled, get a haircut too. This is the ubiquitous world of Wal-Mart, where you can get all these things done and more.

Wal-Mart is the world’s largest retailer, with sales from its four retail divisions in excess of $374 billion for the fiscal year ending January 31, 2008. (As a comparison, Pakistan’s GDP for 2007 is projected at $476 billion.) It employs 1.9 million people in over 6,800 stores worldwide, and boasts 180 million customers per week in traffic. As a mass-discounter, Wal-Mart’s strategy has been to keep its prices low and to make up margin through volume sales.

Wal-Mart Stores

Customer satisfaction is a primary objective, and this is done by ensuring a wide range of quality merchandise, guaranteed product satisfaction, convenient store hours, ample parking and an overall pleasant experience. Wal-Mart also boasts an enviable logistics and supply chain management system, through which costs are minimized, allowing low product pricing.

Wal-Mart’s stores are built according to corporate design specifications, with changes made to accommodate local planning and zoning laws if necessary. Parking is plentiful, and access to and from the store is convenient. Stores feature a number of check-out lanes, and a recent addition has been self-checkout, which has reduced staffing needs. Product placement is standardized so that customers know where they can find what they are looking for. An interesting feature is the in-house television system that provides information ranging from special offers to recipes.

Wal-Mart’s Super Centers offer a wider range of products than its other stores, which has made them the most popular choice of consumers. Sam’s Club is the corporation’s wholesale club, targeting both individuals and businesses. On a personal note, I have been a latecomer to the Wal-Mart bandwagon.

Wal-Mart StoresDuring my two years in graduate school, I bought a few items from Wal-Mart, but only because I was strapped for cash. At that time, the perception among my peers was that Wal-Mart was for rural, trailer-home occupying poorer Americans, and as budding yuppies, we would avoid the store. These were the days of the dot-com boom, when I could pay $4 for my Starbucks coffee without blinking.

I was single, and with only myself to think about, I would frequent fancier stores where I would pay much more than Wal-Mart for the very same item. If I had to use a discounter, I would prefer Target, which is more upscale than Wal-Mart and targets middle-market consumers. I became a Wal-Mart convert when I moved to rural North Carolina, stopped working and started a family. With just one income to rely on, and a small child with a never-ending need for clean diapers, I became a Wal-Mart junkie and discovered the joys of saving money. I also began frequenting Sam’s Club, where I could buy products like formula, diapers, detergent and paper towels in bulk and save even more. And then I discovered electronics were cheaper at Wal-Mart, as were car tyres and contact lenses, and I was addicted. But I still have a thing about clothes and footwear, which I buy from other stores.

Wal-Mart StoresBecause of its stature as a retail juggernaut, Wal-Mart faces intense criticism too. Much of this focuses on its ability to keep prices so low that smaller stores in the area who do not have the same buyer power and cost structures cannot compete. With the US economy facing recessionary pressure, the fact that Wal-Mart makes much of its purchases abroad (especially China) is becoming an issue. This has become a Catch-22 situation, since the very people raising this issue are also consumers demanding lower prices, and so products will continue to be imported.

The future of Wal-Mart appears to be assured. The declining US economy is causing more consumers to migrate towards its lower prices, and high-end retailers will be hardest hit in the short term as they lose customers to discounters. International expansion into growth markets through acquisitions, joint-ventures (such as in India) and de novo operations will fuel further Wal-Mart’s growth into more communities around the world.

Faryal, who lives in Texas, has an interest in banking and finance. (Pun intended)

This article was originally published in the print edition of Valuemag, issue 1, May 2008.

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Fareeha Qayoom
Fareeha Qayoom
Publisher and editor-in-chief of Tkfr.com and former print editions of The Knit-Xtyle Fashion Review (tkfr), a trade newsletter for the textile and apparel industry of Pakistan. In short, Publisher, editor, and a blogger. In addition, she has served as Managing Editor of MIT Technology Review Pakistan, print and web editions (2015-16). Total of 7 editions were published under her leadership by ITU, Punjab's first public technology university under the license of MIT Technology Review (USA). She has also managed Value Mag in the same capacity, a real estate and lifestyle magazine for Value TV - 2008-9. Published freelancer for The News on Sunday 1994-96. Fareeha has over 21 years of solid management experience – of managing brands (like Harley Davidson, Munsingwear, Chaps, Chaps Ralph Lauren etc.,), Retailers (like Target, Mervyns, Kohl's, Marks and Spencer etc.,), customers (VPs, Product Managers, Unit Managers, and Buyers), and products (apparel - woven, knits, men's, women's, children's, Print and online publishing units), projects, teams, and processes, information, content, and data, staff, vendors, and time. Versatile and adaptable with international exposure, communication and language skills (oral and written), and a consistent track record of achieving company targets and objectives, plus a MA in Political Science from Punjab University, a MSc in Economics from La Salle University, Louisiana, USA, and a BA in Economics from Kinnaird College for Women.

5 Comments

  1. Wal-Mart plans more ‘big box’ stores in India retail drive
    Wednesday, 14 Apr, 2010

    NEW DELHI: Giant retailer Wal-Mart says it will launch more “big box” wholesale outlets in India as it hopes for a government green light that would fully open up the vast retail sector to foreign players.

    Wal-Mart, the world’s number one retailer, opened its second wholesale store Tuesday in Chandigarh in the northern Punjab state after entering the Indian retail market last May as part of an international expansion.

    It plans to open at least 10 more wholesale stores in the next three to four years, Scott Price, Asia chief executive of US-based Wal-Mart, told AFP in an interview.

    “We see the wholesale market as a very interesting opportunity to reach out and provide service to the kiranas — the ‘mom-and-pop’ stores,’” he said.

    Wal-Mart is seeking to build a partnership with the 15 million family-run stores making up 95 per cent of India’s retail landscape that might ease strong opposition to foreign retailers.

    http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/business/08-wal-mart-plans-more-big-box-stores-in-india-retail-drive-ts-04

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  2. Wal-Mart may scale back bid, keep Massmart listed

    By David Dolan and Brad Dorfman

    JOHANNESBURG/CHICAGO | Thu Oct 28, 2010 2:05pm EDT

    JOHANNESBURG/CHICAGO (Reuters) – Wal-Mart Stores Inc (WMT.N), the world’s biggest retailer, may scale back its $4 billion takeover bid for Massmart (MSMJ.J) and buy a more than 50 percent stake instead, a move that could keep the South African firm listed in Johannesburg.

    http://www.reuters.com/article/idUSTRE69R13S20101028?feedType=nl&feedName=usbusinessearly

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    Published: December 6, 2010

    WASHINGTON — The Supreme Court on Monday agreed to hear an appeal in the biggest employment discrimination case in the nation’s history, one claiming that Wal-Mart discriminated against hundreds of thousands of women in pay and promotion. The lawsuit seeks back pay that could amount to billions of dollars.

    http://www.nytimes.com/2010/12/07/business/07bizcourt.html?partner=rss&emc=rss

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  4. Wal-Mart tops view; key sales down 1.1 percent
    By Jessica Wohl

    CHICAGO | Tue May 17, 2011 6:54pm EDT

    CHICAGO (Reuters) – Wal-Mart Stores Inc’s (WMT.N) U.S. same-store sales have fallen for two straight years, as customers struggle with high unemployment and wages that are not keeping up with rising prices for food and other basics.

    http://www.reuters.com/article/2011/05/17/us-walmart-idUSTRE74C4GY20110517?feedType=nl&feedName=usbusinessearly

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  5. Wal-Mart Is Being Pressed to Disclose How Global Suppliers Treat Workers
    By STEPHANIE CLIFFORD
    Published: May 30, 2011

    Wal-Mart is facing new pressure to monitor and disclose how its international suppliers treat their workers.

    http://www.nytimes.com/2011/05/31/business/31walmart.html?_r=1

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