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Walmart’s Loyalty Program

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Walmart’s Loyalty Program
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Disappointing economic results were reported this week, with retail sales stagnating in August due to less than robust job growth and consumer confidence that continues to waiver. The U.S. Census Bureau reported that median income figures, adjusted for inflation, have declined 2.3% since 2009.

In related news, a report from the Conference Board on World Income Inequality stated that the gap between rich and poor in both the United States and Canada is growing to record proportions. Surprisingly resilient Canada has seen its span between have and have-nots growing at even a faster rate than the U.S..

Recent activity by Walmart indicates they are not only aware of these trends but are ahead of the curve introducing measures to engage and increase share of wallet with customers.  In fact, they added several features to their loyalty program over the past few weeks.

You didn’t know that Walmart had a loyalty program? Here are some of the key features:

  • Supporting its brand promise of “Everyday low prices” with weekly price scans of 60 competitors to make sure they deliver on the promise
  • A renewed layaway payment plan to ease the pain of major purchases for customers
  • Re-stocking it shelves with a broader selection of goods, reversing an attempt to streamline inventory and offering more choice to customers
  • Giving attention to private label product lines, focusing on its George clothing line

Walmart doesn’t have an explicitly named loyalty program, nor is it awarding promotional currency or giving away punch cards and key fobs at the register.

It does have a Customer Strategy, however, one that is based on understanding of its competitive environment and the needs of its customer base, while leveraging its supply chain advantage.

The illustration of Walmart’s approach to attracting and retaining customers is an example of how building Customer Strategies contrast from launching loyalty and rewards programs. Walmart is also unique in its market position and their strategy is not easily emulated by Target, Costco, BJ’s or others seeking traction with consumers in tough times. There can only be one low-price leader in a category and when that leader also happens to be the supply-chain gorilla, there are diminishing returns to be reaped as a follower, fast, slow or any speed in between.

When you sit down to create strategy to meet client objectives, keep Walmart in mind. They may be the anti-loyalty enterprise in a traditional sense, but they do represent a valuable case study in building effective Customer Strategy.

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