Walmart : Location Strategy

Walmart : Location Strategy

Walmart uses an outside company that helps them locate and track their customers based on who has viewed their advertisements, where they had seen them, and how many times they viewed them. This helps the company build comprehensive audience segments.

Walmart’s materials and goods are made available to the company’s target consumers through strategic warehouse locations. They have a comprehensive set of online information systems for real-time reports and monitoring in order to maximize the market reach.

Walmart has been targeting urban areas for the construction of the Walmart Neighborhood Market. (Lutz) The store is similar to Whole Foods as it focuses on fresh foods. In areas that are said to be “food desserts” these neighborhood markets can capture large populations on consumers simply due to the location.

Walmart uses the service location strategy for picking the location of it’s stores. This option is used by most retailers because cost can be unpredictable so they rather focus on increasing revenues primarily and keeping cost down secondary. This is why a lot walmart’s core values are based on keeping customers happy and knowing what their customers are expecting from them as a brand and retail provider.

Layout Strategy

Walmart has started implementing a new style to their stores’ layout starting in 2017. The new layout would introduce technology-driven and sustainable changes to their stores. This has occurred in limited stores since the adoption of the idea.

Walmart uses shoppers’ behaviors for the layout design of its stores, The layout design of individual stores is based on consumer behavioral analysis and corporate standards.

Walmart Neighborhood Markets are around 20% the size of the Walmart Supercenters. (Lutz) The store only has food and produce within the interior. Like most grocery stores, the store has promotional items strategically placed at the front and end of aisles and at eye-level within the interior to draw customers into purchasing these items.

Walmart uses cross-docking layouts for their warehouse. Since they sell a variety of products, it’s done this way to keep down the storage of items and to instead have them available for sale as soon as possible. “ Walmart’s warehouses have adequate space allocation for company’s trucks, suppliers’ trucks, and goods, With efficiency, cost-effectiveness, and cost minimization, the firm satisfies needs in the decision area of operations” ( Smithson, 2017)

Suggested Improvements

Walmart should begin implementing the layout upgrade in more stores; specifically ones with high traffic and higher revenue. 3

Walmart should look out to convert current stores to super-centers where they can operate for more hours with upgraded layouts to full optimize the resources.

Rather than just focus on urban areas, Walmart should place Neighborhood Markets in rural settings also, as they would be competing with smaller companies rather than large grocery stores, like Whole Foods, who have already developed a loyal customer following.

Walmart is presently focused on their online presence to expand, I think they should find a way to find a balance of store and online expansion because both are intrical in staying ahead of competition. Lots of companies have lost focus of their core customers while trying to conquer a new market or new way to offer their products.

Sources

Barris, M. (n.d.). Walmart uses location-based targeting to create more accurate audience segments. Retrieved July 12, 2018, from https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/strategy/20586.html

Heizer, J.H., & Render, B. (2014). Principles of Operations Management: Sustainability and Supply Chain Mangement(9th ed.). Boston: Pearson Education Limited

Lutz, A. (2014, August 15). These Smaller Wal-Mart Stores Could Replace Supercenters. Retrieved July 15, 2018, from http://www.businessinsider.com/wal-mart-neighborhood-market-strategy-2014-8

Muench, J. (n.d.). A Look Inside Walmart’s Next-Gen Test Stores. Retrieved July 12, 2018, from https://blog.walmart.com/innovation/20170512/a-look-inside-walmarts-next-gen-test-stores

Smithson, N. (2017, January 28). Walmart: Operations Management 10 Decisions, Productivity. Retrieved from http://panmore.com/walmart-operations-management-10-decisions-areas-productivity-case-study-analysis

Heizer, J. H., & Render, B. (2014). Principles of operations management: Sustainability and supply chain management(9th ed.). Boston: Pearson Education Limited.


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