With annual sales of more than $1 billion, Walmart is easily one of the largest companies in the United States. Based out of Arkansas, the company started with just one store and now has retail outlets all across the country. Though the company has its fair share of complaints, it manages to continue outperforming its previous sales records year after year.
Entrepreneurs hoping to operate their own companies can learn a thing or two from this retail giant.
1. Keep Prices Low.
Walmart does a good job of keeping prices low, but few realize that the company bases its prices on the surrounding demographics. The company will actually research the average annual income of a city before setting its prices. In rural areas with a lower annual income, the prices at the store are cheaper than shoppers would find in other Walmart stores. The company also bases its prices on the prices found in neighboring shops. Walmart will often bring its prices down to less than what other local stores charge. Once it builds up its customer base, it will slowly increase those prices.
2. Make Customers Feel Comfortable.
Every Walmart in the world features a door greeter standing right outside the doors leading into the store. Using a greeter makes customers feel more confident from the moment they enter those doors. Walmart also uses door greeters as a way to cut down on shoplifting and theft. The idea is that someone who wants to steal will feel less inclined to steal after someone greets them. Those potential thieves also know that they will need to pass by that friendly face when leaving the store, which some thinks will reduce their urges to steal.
3. Avoid Being Too Focused.
Being too focused on goal is a common mistake made by new entrepreneurs. They decide to open a business with a narrow focus with the thought that this will appeal to one specific group of people and give them something that they can’t get elsewhere. Walmart found success after finding a way to give customers everything they might need. It’s one of the few stores in the world where shoppers can buy clothing, tools, toys for the kids, groceries and home decorations. Walmart also partners with local business owners to give customers even more. Many Walmart locations now have an eye doctor, beautician, salon, restaurant or fast food outlet on-site.
4. Listen to Customers.
One reason for the success of Walmart is its ability to listen to its customers, according to Indonesian business tycoon Sukanto Tanoto. Walmart was one of the first retail shops that offered layaway on a large scale. After noticing that the use of its layaway program declined, the company pulled this option from stores. When customers complained, Walmart announced that it would bring back layaway during the holiday season.
The new layaway program has a number of limitations on it. Customers can only put things in layaway that are worth $15 or more, and there are a number of things they can no longer put in the program. Walmart listened to the complaints registered by shoppers and stated that it would revamp the system before the next holiday season. Though Walmart has its fair share of detractors, new entrepreneurs can learn from the examples that the retail chain set.