Three Distinct Merchandise Units of Walmart
Walmart U.S. do most of their business in three distinct merchandise units. Most of their business is done in supercenters, discount stores, local markets and other small stores, as well online through their eCommerce websites. The grocery unit consists of meat, produce, natural & organics, deli & bakery, dairy, frozen foods, alcoholic beverages, and nonalcoholic beverages.. The grocery unit of merchandise also includes, baby products, domestic and household chemicals, paper goods, pet supplies, and consumables such as health and beauty aids. Health and wellness includes pharmaceutical services, optical services, clinical services, and over-the-counter drugs and other medical products. The general merchandise unit includes entertainment (e.g., electronics, cameras and supplies, photo processing services, wireless, movies, music, video games and books), hardlines (e.g., stationery, automotive, hardware and paint, sporting goods, outdoor living and gardening), apparel (including shoes, jewelry and accessories), and home (e.g., home furnishings, housewares and appliances, bedding, home decor, and fabrics and crafts).
Walmart U.S. also offers energy services like fuel, and financial services and related products, including money orders, prepaid cards, money transfers, wire transfers, check cashing and bill payment. These services, which aren’t a part of the three main merchandise units, total less than 1% of annual net sales. Distribution Centers Walmart operates over 150 distribution centers which are hubs of activity for their business. They distribute to stores and clubs, and direct deliver to customers. In order to do this daily, Walmart retains an impressive lineup of 6,100 tractors, 61,000 trailers and more than 7,800 drivers. Each distribution center is more than 1 million square feet and employs more than 600 workers unloading and shipping over 200 trailers daily, supporting right under 100 stores within a 150-mile radius. Each day, distribution centers ship general merchandise, and dry and perishable groceries, along with other products to consumers.
Walmart has 6 disaster distribution centers, each tactically situated throughout the country and are supplied to aid with rapid response to at risk communities in the event of a natural disaster. Walmart Foundation The Walmart Foundation pride themselves on their 3 Pillars of Giving, opportunity, sustainability, and community. Within their own company, they have invested $2.7 billion on higher wages, education, and training, and promoted over 230,000 associates. In promoting inclusion, women make up 30% of corporate officers, and 55% percent of their total U.S. workforce. Additionally, the Walmart Foundation $100 million in in programs that help create economic mobility within and beyond retail.
They’ve also shown dedication to reducing emissions and energy intensity by receiving 28% of their electricity from renewable sources. In 2018, the Walmart Foundation gave more than $38 million in hurricane relief. In 2015, Walmart donated 2.5 billion pounds of food in the U.S. alone. In 2018, associated volunteered 850,000 hours in the U.S. Competitive Landscape Walmart uses psychographic and demographic segmentation strategies to understand the psyche of the consumer. They know that customers want everyday low prices (EDLP!).
Walmart competes with physical retailers, department, retail and wholesale grocers, drug, dollar, variety and specialty stores, supermarkets, hypermarkets and supercenter-type stores, and digital retailers, as well as catalog businesses. There is also competition with others for desirable sites for new or relocated retail units. Some sites that Walmart was able to acquire were Jet.com, Shoes.com, Hayneedle, Mod Cloth, and Bonobos. Acquiring Jet.com allows Walmart to reach more urban and millennial consumers. Shoes.com allows them to compete in the footwear sector. Hayneedle gives Walmart an advantage as a furnishing and decor retailer because Hayneedle has the world’s largest outdoor living selection.
Bonobos provides a personalized shopping experience for men’s clothing with an engaging eCommerce platform that makes shopping enjoyable. Altogether, Walmart’s acquisitions result in having an assortment of brands and categories that give customers an awesome experience. To compete in eCommerce, Walmart established a partnership with Microsoft to further accelerate Walmart’s digital transformation in retail. Choosing Microsoft as their cloud provider lets them use the full range of Microsoft’s cloud solutions and tools. The most relevant tools being Microsoft Workplace, Microsoft Stream, and Microsoft OneDrive. ModCloth provides indie and vintage-inspired women’s clothing, allowing Walmart to better reach female consumers.