CUSTOMER SERVICE & LOGISTICS OPERATIONS : THE SUCCESS OF LEGENDARY WALMART HYPERMARKET CHAIN:

"There is only one boss: the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. Every time Wal-Mart spends one dollar foolishly, it comes right out of our customers' pockets." - Founder of Walmart!        

Walmart, founded in 1962 by Sam Walton, is one of the most successful multinational retail companies that operates approximately 10,526 stores in 24 countries and eCommerce website and has over 2.3 million employees.

The company’s core businesses are retail and wholesale businesses, with a pricing strategy of “Every Day Low Price (EDLP)” (Walmart, 2021). Walmart has different types of stores covering various customer segments: Sam’s Club (specialised store for registered members), Walmart U.S, Walmart International (Bhasin, 2020).

This report will explore the relationship between customer services and logistics and how Walmart practises its customer services to improve customer satisfaction and logistics. Then the order winner of Walmart that contribute to the company’s success will be discussed.

#. Customer Service in International Logistics:

Customer value

It is no exaggeration to say that the ultimate success and failure of a business highly depend on how well customer value is conveyed in the marketplace. Customer value is the result of the customer’s assessment of all benefits and costs of goods or services compared to other alternatives.

In other words, it is the difference between the benefits and costs (Leseure, 2010; Christopher, 2016). Leseure (2010) distinguished four characteristics of customer value: market-perceived, complexity, relativity, and dynamic.

#. Four Characteristics of Customer Value:

While understanding the characteristics of customer value, it is also essential to identify the benefits and costs of a product to deliver customer value in the market properly. Benefits consist of quality and service, and costs comprise cost and lead time. Therefore, customer value can be expressed in equation as follows:

#. Customer Value = Quality × Service

#. Customer Value = Cost × Lead Time

##. Constituent Elements of Quality, Service, Cost, and Lead Time:

Logistics management is fundamental for effectively delivering customer value as it is almost the only factor that can affect both the denominator and the numerator of the customer value equation        

#. Customer service:

Customer service is defined as “the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience”.

Good customer service is requisite for maximizing customer value, and logistics play an important role here. Logistics is defined as “the positioning of resources in the right place, at the right time, in the right quantity, at the right quality, at the right price”, and these ‘rights’ of logistics contribute to fulfilling ‘seven rights’ of customer service which include right quantity, cost, product, customer, time, place, and condition.

#. Core Product and Product Surround:

#. What Can We Learn from Walmart’s Customer Experience Evolution?

Anyone working in?customer experience?will know the famous quote from Walmart founder Sam Walton: “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” It is a fantastic illustration of Walmart’s journey of growth and reinvention, always driven by the ever-evolving customer.

One of the key strengths of the company, however, is that with great scale comes great data. The retail giant collects about 2.5 petabytes of unstructured data from 1 million customers every hour, so it should be no surprise that technology, automation and data are the main fuel of its current reinvention in CX.

##. So what can we learn from Walmart’s customer experience evolution?

“Every time Wal-Mart spends one dollar foolishly, it comes right out of our customers’ pockets. Every time we save them a dollar, that puts us one more step ahead of the competition—which is where we always plan to be.”― Sam Walton, Sam Walton: Made In America        

1.Follow the data

Predicting and managing the supply chain in the most accurate and efficient of manners became an enormous asset to offer the best customer experience in the COVID-19 era. And so the retail giant has successfully invested a lot in creating an intelligent flow in a fully-integrated data system. An example are the “internet of things” sensors across over 2,200 trailers to give real-time information around the quality and freshness of its deliveries.

2.Automate it

Walmart continuously tries to expand and update the automation of recurring services in order to be able to focus on the human side when it’s needed the most. It’s all about convenience, speed and helping customers save time: from a touchscreen tire-search kiosk and a Toy Explorer to the famous Walmart pickup towers.

3.Be Hybrid

Retail lives both online and offline. There’s no way around it, and Walmart is one of the greatest at combining the best of both worlds.

Walmart Pickup Towers make sure that customers never have to wait in line if they have something delivered in-store, with Express Delivery in up to two hours soon to be available in nearly 2,000 stores. The hybrid Scan & Go app allows shoppers to scan items with their phone as they gather them into the shopping cart, then checkout with their phone’s digital wallet and walk out. Walmart even experimented with drone delivery.

4.Lifelong learning

More than any other retailer, Walmart understands the importance of lifelong learning for its employees to keep up with the ever-changing customers and market. It’s a huge task to train and retrain your 2.3 million associates around the world, of course.

One of the biggest training challenges for Walmart was that associates cannot be trained in the store and so it uses virtual reality as an immersion tool which makes the training more fun, satisfying, efficient and fast. What might require 90 minutes of classroom training can now be completed in 20 minutes.

5.Enter new industries

This is a dynamic that we’ve seen happening in a lot of the world’s leading and most innovative companies: giants like Amazon, Toyota, Google and Ping An are no longer content to stay in their own industry’s lane, and Walmart is no different here.

Earlier this year, Walmart announced that it is investing in Cruise, GM’s self-driving vehicle subsidiary. The companies started working on a pilot program to use Cruise self-driving vehicles for deliveries in Scottsdale in Arizona, but recently, they decided to take that relationship to a new level and invest in their own automated logistics to ensure speedy, safe and efficient delivery.

For years Walmart has offered prepaid debit cards, domestic and international money transfers, bill pay services, tax preparation, instalment financing, and other financial services through its partnerships with Green Dot, NetSpend, American Express,

MoneyGram, PayPal, Jackson Hewitt, and other providers. In January of this year, it announced a strategic partnership with fintech investment firm Ribbit Capital to “develop and offer modern, innovative and affordable financial solutions.” Ribbit’s investment portfolio includes well-known fintech companies including Robinhood, Credit Karma, and Affirm.

Walmart already invested in 20 clinics staffed with doctors and dentists that offer affordable dental, x-rays, and office visits. And its 4,700 domestic stores feature pharmacies that also have been effectively dispensing prescriptions at very affordable prices.

But recently, it has made the bold move of acquiring telehealth provider MeMD, planning to offer nationwide virtual healthcare services to further advance its ambition to be a market leader in this sector.

Know your competition

It may sound underwhelming, but it’s also very clever of Walmart to follow and sometimes even mirror the paths that Amazon – its biggest competitor – has taken over the past years. In many ways, it’s easier for a newer, tech-driven company like Amazon to stay ahead of the market and a lot less obvious for an incumbent like Walmart.

Become a superapp

Perhaps the most interesting concept that I read in my research was Karen Webster’s theory that Walmart is striving to become a superapp, similar to those in China, like WeChat: some sort of “interrelated ecosystem of physical and digital”.

If you add all the things described above together, it seems to be pointing in that direction: “the expansion of its third-party marketplace with Shopify;

the focus on healthcare via Walmart Health centers; the investments in ecommerce, logistics, supply chain and inventory to match demand with supply and consumer fulfilment preferences;

the promise of Walmart+; the JV with Ribbit Capital to provide banking services to its customers and employees; and the availability of BNPL options with Affirm to appeal to a new user demographic.”

All of these decisions have been made to move Walmart from a “preferred destination” to the consumer’s “primary destination”, to paraphrase CEO Doug McMillon’s Q4 2020 earnings report.

All in all not a bad ambition for a 59-year-old company with firm roots in the bricks-and-mortar world.