Wal-Mart Stores, Inc. wants its physical and digital retail solutions to work seamlessly together. As the retailer progresses toward achieving its goal it is developing greater insight that its customers may expect from retailers going forward. The expectations breakdown into three attributes: simple, easy and personalized.
“We believe bringing the power of ‘and’ to our customers means they don’t have to shop in one channel,” said Cindy Davis, Wal-Mart’s executive vice-president of global customer insights and analytics, on April 22 in a presentation at the IRI Summit in Austin. “They will be able to shop in a store, on-line with a PC or mobile device. They will be able to pick up in store or have it delivered. They will be able to shop on their terms.”
To highlight the dramatic shift facing food and beverage marketers as well as retailers, Ms. Davis recounted the story of one customer she interviewed who told her “if it’s not on my phone it doesn’t exist.”
“She is using the phone to research, it’s her source of information for what’s for dinner, and parenting advice,” Ms. Davis said. “Plus, she is using it to manage and simplify her life. This is especially true for millennials. One in four are doing half or more of their shopping on-line. Eight in 10 are using the phone in the store. It’s not an ‘or’ world it’s an ‘and’ world.
“As we forge ahead to create retail solutions there is some great news to us. All of our customers are engaged digitally. (Baby) boomers are already making purchases on-line. They are not behind the curve. The bottom line is our customers today, regardless of generation and income level, are accessing technology to manage their lives. Exceeding their expectations in this crazy world will be the challenge.”
Wal-Mart has been studying the drivers of retail choice for about a decade and Ms. Davis said they have not changed. They are convenience, price, assortment and experience.
“Convenience is still No. 1, but the definition has changed,” Ms. Davis said. “Today, convenience is defined as fast and easy access. We are working to understand and deliver on that fast and easy access.”
But she added that price, assortment and experience are not one dimensional attributes.
“Our customers are not holding back,” Ms. Davis said. “They are telling us what they want from a physical and digital experience. Specifically, they want it to be simple, empowering and personalized.”
Contrary to popular belief, Ms. Davis noted consumers want companies to show them that they know them.
“They get that we have information about them,” she said. “This is no surprise. What they are asking us to do is use it. They want us to use it to recognize them as individuals, improve their experience and make sure our communication with them is relevant to them.”
To achieve this level of personalization Wal-Mart has built what Ms. Davis called an on-line “personalization engine” to help the retailer’s customers find what they are looking for.
“If you go to the web site you will get a different home page based on where you are, the weather, purchasing history, etc.,” she said. “We’ve been able to do it by bringing together in-store and on-line purchasing behavior.”
Finally, Ms. Davis emphasized the importance of simplifying the customer's experience.
“Time is our customers’ most precious resource,” she said. “They are looking for solutions that are simple; they want us to remove a step or do it for them.”
With that in mind, Wal-Mart has leveraged its learnings from its ASDA business unit in the United Kingdom to develop an on-line grocery program in the United States. The effort is currently being tested in five markets and offers customers the option of free delivery or pick up at a Wal-Mart store.
“We tend to assume people want things delivered,” Ms. Davis said. “But that is not necessarily true. Think how much moms drive. I’ve seen some estimates it is as much as 15 hours per week. Sometimes it is more convenient for people to pick up their groceries after they drop their kids off at school.”
The pilot program is going well, Ms. Davis said, with 80% of orders coming from repeat customers.
“The success we are seeing so far shows we can leverage innovation from ASDA and bring it to the U.S. It also shows the power of the concept and that is really a global opportunity,” she said.