Wal-Mart Stores, Inc

• Started by Sam Walton in 1962
• World’s largest – an American multinational retailing giant
• World’s largest – an American multinational retailing giant
• As of January 2017, it has 11,695 stores and Sam’s clubs in 28 countries
• 90% of Americans live within 15 miles of a Wal-Mart store
• In 2016, about 62% of Wal-Mart’s US$ 486bn revenue came from its US operations
• Wal-Mart India owns and operates ‘21 Best Price Modern Wholesale’ stores

What differentiates Walmart?

EDLP (everyday low price): Wall-Mart pioneered EDLP since its first store in 1962, and captured millions of customers worldwide. EDLP is a pricing strategy that promises consumers that they will get better and lower prices on products than what competitors provide, without the need to wait for promotions or price discounts

Retail Link System (RLS): Wal-Mart revolutionised the way retail companies manage their supply chains in more ways than one. Walmart’s RLS is one of the largest B2B supply chain systems in the world and shares its vast trove of real-time sales data and forecasts with its largest suppliers that stock its shelves. This data helps the suppliers to plan their production and product delivery before stock-outs. The system gives the supplier 100 weeks of product sales history and tracks the product’s performance globally. For example, Procter & Gamble set up an inventory system with Wal-Mart that included an automatic re-ordering process linking the supplier and retailer. This system alerts P&G when a product is running low at a store, which in turn triggers an order for the nearest P&G factory to ship the item to a distribution center or directly to the store. For P&G, synchronising its product data with Wal-Mart’s sales saved the supplier millions annually. The goal is to master the art of knowing what it needed, how much is needed, and when it is needed.

Focus on smaller towns: Wal-Mart’s focus is on smaller towns instead of urban and suburban locations where its rivals Target, Costco, and K-Mart are less concentrated.

Cross-docking: To eliminate extra storage costs and maximise efficiency, Wal-Mart’s distribution centres use cross-docking. Once goods enter Wal-Mart’s distribution centres, they are crossed from one loading dock (inbound) to another (outbound) in 24 hours. This eliminates storage costs, allows drivers to continuously replenish stock at the retail stores, and helps bring unsold merchandise back to the distribution centre

Only members, warehouse shopping, no advertising: Costco’s high sales are achieved without any advertising (no newspapers, radio, TV, or billboards), except target-marketing when it opens a new warehouse. New members are added due to positive word-of-mouth from existing members. 91% of all members currently renew their membership in US/Canada (i.e., attrition rate is only 9%).

Lower operational costs: Costco drops its shipping pallets directly on the warehouse floor, no stocking up products on shelves. This saves millions in labour cost. Its floors are bare concrete slabs, which are more durable and easier to maintain

Aldi

1. Aldi is a common brand of two leading global discount supermarket chains – Aldi Nord and Aldi Sud – based in Germany, with over 10,000 stores in 18 countries
2. The chain was founded by brothers Karl and Theo Albrecht in 1946
3. The two brands operate independently – internationally, Aldi Nord operates in Denmark, France, the Benelux countries, the Iberian Peninsula, and Poland. Aldi Süd operates in Ireland, United Kingdom, Hungary, Switzerland, Australia, Austria, and Slovenia.