A case study from the Economist Intelligence Unit Walmart: leveraging mobility throughout the customer journey March 2014 E very week 140 million consumers shop at Walmart US—and about 70 million of them have smartphones The proportion of customers that use smartphones rises to 75% for those under the age of 35 The mobile app has become the new frontier for omni-channel retailers—a space that creates myriad opportunities, not least for the world’s largest store group “What’s exciting about mobile technology is that we are able to leverage our assets as the world’s largest retailer to have a great combination of digital and physical,” says Ben Galbraith, Walmart Global E-commerce’s vice-president of global products Walmart sees mobile technology as a gamechanger because of the way that it draws together the digital world and its 39 square miles of shop floor around the world T Sponsored by he Arkansas-based company is best known for introducing inexpensive “big box” retailing to the US and beyond But in the last two years it has aggressively ramped up its mobile presence According to Internet Retailer, a retail trade magazine, Walmart is the world’s fourth-largest seller of goods via mobile devices, with estimated annual sales of US$660 million The company’s response to the proliferation of Internet-connected, app-loaded mobile devices has been to use new mobile technology to deepen its relationship with its customers The imperative to lead in the mobile field has been pitched as a project to “help customers save money, live better.” © The Economist Intelligence Unit Limited 2014 Walmart recognises that customers use its apps in a fundamentally different way than its mobile website “The website is about e-commerce,” Galbraith says, “whereas apps are about loyal customers who are interested in in-store shopping.” Customers are using the app to find their nearest store and to navigate it once they arrive (Walmart’s largest sites are about the size of three football fields.) More intriguingly, they are using the app to see which items are new and which are on sale or “rollback.” Walmart’s developers in Palo Alto are particularly excited by the latter category The company has always balked at the prospect of personalised promotions because they jarred with its “everyday low prices” philosophy “We are very careful to give all customers access to our best prices, and that is one of the reasons Walmart was so slow to get into couponing,” says Galbraith “It has been a core value of ours to make sure all customers can get access to best prices just by showing up.” Stores are already “geo-fenced”, which means that location-aware smartphones detect when they are in-store and the app can respond accordingly But what if customers could use their smartphone apps to access coupons and promotions, with a selection that had been automatically curated according to their spending habits? “When we think about how much smarter customers could be about their store visits if they planned them in advance, we get very excited,” says Galbraith “We feel like they would successfully Walmart: Leveraging mobility throughout the customer journey save more money and time and be able to live better We are focused on optimising those particular features.” W almart’s current data reveal that the potential is vast On average customers who use the Walmart app make two more trips to stores per month than non-users, and spend 40% more Heavy users make four more visits and spend 80% more Although it is not clear to what extent those figures are the result of the app driving traffic to stores versus reflecting greater uptake of the app among Walmart’s most loyal customers, the figures prove that Walmart’s best customers find the app improves their experience The app’s role in fostering loyalty is at odds with the stereotype of mobile devices in the retail industry: that they make the competition omnipresent and the consumer omniscient Some retailers have declined to display barcodes to prevent customers from scanning and pricechecking with their smartphones But Walmart says that the phenomenon of “showrooming” is less threatening to them because they are ordinarily the price leaders Indeed, some 10% of mobile purchases are carried out when the app is checked-in to in-store mode This becomes increasingly important as Walmart’s diverse range of store formats—Walmart Express stores are less than one-tenth the size of a Supercenter—means that the “infinite aisle” of the smartphone counteracts space constraints The mobile app and the new, ever-connected consumer are taking the industry into a new chapter; to reflect this new reality Walmart has begun attributing online sales to its local stores The drive towards channel agnosticism is also © The Economist Intelligence Unit Limited 2014 true within the mobile realm: Walmart is increasingly keen to ensure that Android users, for example, have the same experience as iPhone users “It is important that the customer has a unified interface,” says Galbraith “We’re reaching a point where if we have a feature or programme in one channel we will have it in all channels because it is difficult for us to predict in which channel a customer will choose to engage with us.” The emerging influence of the smartphone continues right through to checkout The retailer has introduced Scan & Go technology to 220 stores, allowing customers to scan their items with their own smartphones and leave without having to wait for a cashier While Galbraith emphasises that Scan & Go is still in the testing phase, its future seems bright “We want to make sure we get the experience right before we roll it out,” he notes “But what is heartening is that more than half of our customers come back to use it a second time We feel we have a great foundation.” Walmart is also keen to have a presence in the fluid mobile payments space It has teamed up with Target and Best Buy to develop Merchant Customer Exchange, a mobile payment solution challenging the likes of Google Wallet, Square and PayPal If the retailers’ standard gains traction in the mobile payment space, Walmart will have secured ownership of the mobile user’s entire shopping journey: from research to browsing through to checkout Walmart believes it has nothing to fear in the mobile world “Our strategy is about leveraging what we think our competitive advantage is relative to our competitors,” says Galbraith “And that’s our stores.” ... are the result of the app driving traffic to stores versus reflecting greater uptake of the app among Walmart s most loyal customers, the figures prove that Walmart s best customers find the. . .Walmart: Leveraging mobility throughout the customer journey save more money and time and be able to live better We are focused... improves their experience The app’s role in fostering loyalty is at odds with the stereotype of mobile devices in the retail industry: that they make the competition omnipresent and the consumer