Task

Adapting to Change: A Critical Analysis of Walmart's Marketing Strategies in the Era of Sustainability and Climate Awareness

Executive Summary

Introduction

Walmart, founded in 1962 by Sam Walton in Rogers, Arkansas, is now a global retail giant (Walton, 2020). The lowest prices anytime, anywhere, according to Walton, boosted Walmart's growth.

By 1967, the Waltons had 24 stores selling $12.7 million (Walton, 2020). Wal-Mart Stores, Inc. went public and expanded nationwide in the 1970s (Walton, 2020).

The 1980s saw the first Sam's Club and Walmart Supercenter, which sold groceries and general merchandise. Walmart's Supercenters and international expansion made it the nation's top retailer by 1990 (Vélez Berríos, 2020).

Walmart integrated online, in-store, and mobile platforms in the new millennium to improve shopping (Vélez Berríos, 2020). Walmart's use of technology and associate skills has evolved to keep it at the forefront of retail innovation.

Walmart has recently prioritised climate change. Walmart has pledged zero emissions worldwide by 2040 without carbon offsets to address climate change (Blumanthal, 2021).

In 2017, more than 4,500 suppliers participated in Project Gigaton to reduce greenhouse gas emissions in retail product supply chains, equivalent to removing 200 million passenger vehicles from U.S. roads for a year (Neebe, 2020).

This report critically assesses Walmart's marketing department's climate change and sustainability efforts. Walmart's strategies, campaigns, and initiatives will be evaluated for effectiveness and environmental alignment in the report. The evaluation will reveal how Walmart incorporates sustainability into its marketing and how it affects brand image and customer engagement.

Task 1: Critical Evaluation of Walmart’s Marketing Activity

1.1 Concept and Importance of Marketing in Walmart

The concept and importance of marketing at Walmart can be comprehensively understood through the lens of the 4Ps (Product, Price, Place, Promotion), a framework which forms the backbone of their marketing strategy.

• Product Strategy: Walmart prioritises customer satisfaction by providing a diverse selection at competitive prices (Chang and Hu, 2020). This strategy includes home appliances, groceries, fashion, beauty, and health products. Walmart's one-stop shopping strategy boosts sales and gives it a competitive edge by offering more products than other retailers.

• Pricing Strategy: Walmart's pricing strategy focuses on Everyday Low Prices (EDLP) and Everyday Low Cost (EDLC) (Smith, 2019). This involves low operating costs, efficient inventory holding, and supply chain costs, which lower prices for customers. Suppliers and customers benefit from bulk sales, which lower prices. This strategy has increased sales, traffic, customer loyalty, and competitive advantage, solidifying Walmart's market leadership.

• Promotion Strategy: Walmart uses various promotional strategies, such as frequent discounts, price matching, multiple advertising channels, and free shipping, throughout the year (Jindal et al., 2021). These strategies aim to boost sales, traffic, customers, and satisfaction. Walmart advertises with slogans like Save Money. Live Better on TV, social media, and billboards.

• Point of Sale Strategy: Walmart's Point of Sale Strategy combines physical stores (e.g., supercenters, neighbourhood markets) with an online marketplace (Taylor, 2022). This strategy includes their store formats, distribution network, strategic store locations, real-time inventory management, and reliable delivery systems to improve customer convenience. This reduced costs and increased sales.
  
  Walmart's marketing campaigns show their commitment to climate change and environmental issues. Some notable examples include:

1. Built for Better Campaign (2021): This campaign promoted sustainable products that benefit families, the planet, and the people who made them. Products with higher nutritional standards were labelled "Built for Better – For You" and those with environmental benefits "Built for Better – for the Planet" (Schirnhofer, 2022). This strategy highlighted Walmart's transparency and aligned their products with sustainability goals.

2. Project Gigaton: Established in 2017, aims to reduce or eliminate one billion metric tonnes (a gigaton) of greenhouse gas emissions from the global value chain by 2030. Over 4,500 suppliers work together to reduce emissions in energy use, nature, waste, packaging, transportation, and product use and design (Neebe, 2020). Suppliers have reduced or avoided 574 million metric tonnes of emissions since its inception, making significant progress (Neebe, 2020).

3. Zero Emissions Commitment: Walmart has pledged to achieve zero emissions globally by 2040, aligning its science-based target to a 1.5-degree Celsius trajectory (Blumanthal, 2021). This commitment, which does not use carbon offsets, reduced scopes 1 and 2 GHG emissions by 23.2% by 2021 from their 2015 baseline (Blumanthal, 2021).

4.  Advocacy for Collective Climate Action: Walmart has been vocal about reducing greenhouse gas emissions in its operations and product supply chains to combat climate change (Walton, 2020). Supporting scaled supplier, NGO, customer, and other initiatives.
   
   Walmart incorporates sustainability into their marketing and business strategies to appeal to environmentally conscious consumers and fight climate change.

1.2 Macro and Micro Marketing Environment

Understand how external (macro) and internal (micro) factors affect Walmart's marketing strategies to analyse its marketing environment require PESTLE and SWOT analysis frameworks:

1.2.1 Macro-Environment (PESTEL Analysis)

• Political Factors: Walmart's global expansion benefits from political stability and globalisation support. However, political pressure for higher wages could affect Walmart's pricing and operations.

• Economic Factors: Walmart's market expansion benefits from economic stability and growth in developing countries. Lower US unemployment may boost consumer spending, benefiting Walmart's sales and marketing.

• Sociocultural Factors:  Trends such as healthy lifestyles, cultural diversity, and urban migration offer Walmart opportunities to adapt its products and marketing campaigns to changing consumer preferences.

• Technological Factors: Walmart can improve its marketing strategies, especially in digital and e-commerce, due to increased business automation, big data analytics, and mobile device usage among consumers.

• Environmental Factors: Walmart prioritises sustainability in its marketing strategies, such as the Built for Better campaign, which highlights the environmental and health benefits of its products.

• Legal Factors: Walmart can market itself as a responsible and compliant retailer through food safety and employment regulations, but tax law reforms may impact pricing strategies.

1.2.2 Micro-Environment (SWOT Analysis)

• Strengths: Walmart has a strong brand recognition, global presence, and efficient supply chain and logistics, enabling efficient marketing strategies globally. Its 'Every Day Low Prices' strategy and market power over suppliers and competitors boost its marketing advantage.

• Weaknesses: Concerns about employee treatment, working conditions, and issues such as gender discrimination and racial practices may harm Walmart's brand image and require careful handling in marketing communications. Overreliance on the US market may hinder global marketing.

• Opportunities: Expanding into new markets and increasing online sales offer diverse marketing strategies. HR and product quality can improve Walmart's brand image and customer perception, affecting marketing effectiveness.

• Threats: Walmart faces challenges in its marketing strategies, including controversy, competition from large and small retailers, and technical issues with its website. Economic uncertainty and trade tensions may necessitate flexible marketing.

Impact on Walmart's Marketing Strategies

These macro and micro factors shape Walmart's marketing in the following ways:

• Product Strategy: Diversity of products, including eco-friendly options, aligns with sociocultural and ecological trends, attracting diverse customer segments.

• Pricing Strategy: Walmart's EDLP pricing strategy is influenced by economic factors and aims to maintain competitive pricing despite internal challenges like thin profit margins.

• Distribution Strategy: Adapting to technological and environmental changes for efficient operations and cost-effective pricing.

• Promotion Strategy: Walmart's Different Kind of Membership, Built for Better, and Live Better Now campaigns demonstrate adaptability to changing sociocultural trends, technological advancements, and environmental concerns, enhancing customer connection and brand loyalty.

• Digital Marketing: The Welcome to Your Walmart campaign showcases Walmart’s customer-centric, digital marketing strategies, utilising data analytics and online platforms.

Thus, Walmart's marketing strategies address external and internal factors, leveraging its strengths and opportunities and countering its weaknesses and threats. The company must adapt its marketing mix to these changing factors to succeed in the retail market.

References

Blumanthal, K., 2021. Analysis of Corporate Carbon Dioxide Footprints and Pledges (Doctoral dissertation, Worcester Polytechnic Institute).
Chang, Y. and Hu, J., 2020. Analysis on the mode of multinational retail enterprises entering Chinese market—Take Walmart, Carrefour and Metro as examples. Modern Economy, 11(01), p.17.
Jindal, R.P., Gauri, D.K., Li, W. and Ma, Y., 2021. Omnichannel battle between Amazon and Walmart: Is the focus on delivery the best strategy?. Journal of business research, 122, pp.270-280.
Neebe, K., 2020. Sustainability at Walmart: Success over the long haul. Journal of Applied Corporate Finance, 32(2), pp.64-71.
Schirnhofer, N.M., 2022. Sustainability Efforts in the Retail Industry: The Case Study of Walmart (Doctoral dissertation, Webster University).
Smith, J., 2019. Big Box Supermarkets (Walmart Supercenters). Increasing Access to Food: A Comprehensive Report on Food Supply Options, p.5.
Taylor, J.B., 2022. The Effect of the COVID-19 Pandemic on Online Shopping at a Traditional Ground Retailer: Walmart, Inc from the Customer Perspective (Doctoral dissertation, Trident University International).
Vélez Berríos, L., 2020. Walmart’s Successful Business Strategies Leading to Competitive Edge in the Retail Industry. Manufacturing Competitiveness.
Walton, S., 2020. History of Walmart. Made in America. Our format.

The Gravity of Climate Change in Retail

• Global climate crisis intensifying (Pierrehumbert, 2019).

• Retail's role:

• Vast supply chains contribute to emissions (Gopalakrishnan et al., 2019).

• Manufacturing, transportation, and waste are major concerns (Vadakkepat et al., 2021).

• Consequences for retailers:

• Supply chain disruptions.

• Increased operational costs.

• Evolving consumer demands.

• Growing urgency for sustainability in retail (Purcărea et al., 2022).

The world is undoubtedly in the grip of a climate crisis, characterized by rising temperatures, unpredictable weather patterns, and increasing sea levels. Central to this narrative is the retail sector.

With its interconnected global supply chains, retail significantly contributes to greenhouse gas emissions, especially through manufacturing processes, transportation, and waste generation. However, this isn't a one-sided story.

Retailers are also victims of the very crisis they inadvertently fuel. They grapple with supply chain interruptions due to extreme weather events, fluctuating costs associated with climate uncertainties, and the challenge of meeting the evolving demands of an increasingly eco-conscious consumer base (Katsaliaki et al., 2021).

There's a clear shift in consumer behaviour, with a heightened demand for sustainable practices and eco-friendly products. For retailers like Walmart, adapting to this new landscape isn't merely about societal responsibility—it's a strategic imperative. Embracing sustainability ensures business resilience, fosters consumer trust, and drives competitive advantage in a market defined by change.

Walmart's Stance on Sustainability

Walmart's "Project Gigaton" aims to reduce emissions.

Strategies:
Collaborative supplier programs (Neebe, 2020).
Renewable energy adoption in stores (Schirnhofer, 2022).
Circular economy approach to waste (Breggin et al., 2019).

Benefits:
Reduced operational costs.
Enhanced brand reputation.
Positive stakeholder relations.

Challenges:
Scaling efforts across global operations.
Navigating regulatory differences in markets.

Walmart, as one of the world's largest retailers, recognizes its pivotal role in addressing climate change. Central to its efforts is "Project Gigaton," an ambitious initiative aiming to eliminate a gigaton of greenhouse gas emissions by 2030 (Asif et al., 2022). To achieve this, Walmart collaborates closely with suppliers, encouraging sustainable practices across the supply chain.

The company is also increasingly harnessing renewable energy sources for its stores, striving for 100% renewable energy consumption.

Another notable strategy is their commitment to a circular economy, focusing on reducing waste and maximizing resource utilization. These efforts bring tangible benefits.

Reduced emissions translate to cost savings, and being a sustainability frontrunner elevates Walmart's brand, fostering trust among consumers and investors (Resche, 2020).

However, challenges persist. Implementing and scaling these initiatives across diverse global operations is intricate. There's also the task of navigating different regulatory landscapes in the various markets they operate in. Yet, Walmart's commitment remains unwavering, setting a benchmark for sustainable retail.

Embracing Social & Governance Principles

• Environmental, Social, and Governance (ESG) through investment screening (Dmuchowski et al., 2023).

• ESG's transformative impact on retail:

• Driving innovation (Alkaraan et al., 2022).

• Enhancing competitive positioning (Guntuka, 2022).

• Walmart's ESG journey:

• Strategic alignment with global ESG standards (Cho, 2023).

• Tangible outcomes: reduced waste, ethical sourcing, community engagement (Penati, 2022).

Environmental, Social, and Governance (ESG) principles have emerged as crucial criteria for measuring the sustainability and ethical impact of a business (Clementino and Perkins, 2021).

These principles are not just theoretical constructs; they play a pivotal role in shaping modern retail. By adhering to ESG standards, retailers can drive innovation, differentiate themselves in a crowded market, and forge stronger bonds with conscious consumers.

For Walmart, ESG is not a mere checkbox. It's deeply integrated into their operational fabric. Walmart's commitment to environmental stewardship is evident in their efforts to reduce waste and promote renewable energy (Neebe, 2020).

On the social front, they focus on ethical sourcing, ensuring suppliers adhere to humane and just practices. Governance-wise, Walmart actively engages with communities, understanding their needs and feedback.

The outcomes of these efforts are multifaceted. Beyond the clear environmental and social benefits, Walmart also enjoys enhanced brand trust, customer loyalty, and, ultimately, a competitive edge in the retail landscape.

Profiling Walmart’s Core Market

Walmart's success can be attributed to its deep understanding of its core market. At the heart of this market are low to middle-class income households, who prioritize affordability without compromising on quality. Families form a significant chunk, often looking for a one-stop-shop solution, be it groceries, electronics, or apparel.

The rise of e-commerce has also seen a surge in online shoppers, seeking convenience alongside value. Additionally, Walmart's vast inventory attracts small business owners, especially those seeking bulk buying options and value deals (Resche, 2020). Recognizing and catering to these diverse segments is paramount.

By tailoring their product selection, marketing strategies, and in-store experiences to these demographics, Walmart ensures a personalized shopping experience.

Digital solutions, such as their online marketplace and pickup services, cater to the tech-savvy consumer, while bulk buying options and value deals appeal to small business owners. By continuously aligning with the evolving needs of its core market, Walmart cements its position as a retail leader.

Merging Sustainability with Target Market Needs

Walmart's ESG Initiatives:

• Eco-friendly product lines (Ertem-Eray, 2021).

• Sustainable sourcing and supply chain management (Das, 2023).

Core Market Values:

• Growing demand for sustainable products.

• Preference for ethically-sourced items.

Sustainable Choices Impact:

• Drive purchase decisions.

• Enhance brand loyalty and trust.

Today's consumers, particularly Walmart's core market, are increasingly conscientious about the environmental and ethical implications of their purchases. Walmart's ESG initiatives, from offering eco-friendly products to ensuring sustainable supply chain management, resonate deeply with these values.

The modern shopper, while seeking affordability, is also drawn to sustainable and ethically-sourced products (Jones et al., 2023). They're more likely to support brands that reflect their personal values, making sustainability not just an environmental imperative, but a business one.

Walmart's efforts in promoting eco-friendly product lines, reducing plastic waste, and advocating for ethical sourcing directly align with this shift in consumer sentiment (Apte and Seth, 2019). These sustainable choices play a pivotal role in shaping purchase decisions.

When customers recognize that a brand prioritizes the environment and ethical practices, it fosters trust and loyalty. For many, it's no longer just about the product's price or quality, but its impact. By merging sustainability with its core market needs, Walmart not only champions environmental and ethical causes but also strengthens its market position.

Competitive Advantage & Future Prospects

Walmart's Competitive Edge:

• Leadership in sustainable retail (Vélez Berríos, 2020).

• ESG adherence attracts conscious consumers (Schimhofer, 2022).

Future Prospects:

• Expanding sustainable product range.

• Strengthening partnerships for sustainable sourcing.

• Innovations in waste reduction and renewable energy.

In today's retail landscape, sustainability isn't just a buzzword; it's a pivotal differentiator. Walmart's steadfast commitment to ESG principles positions it as a leader in sustainable retail. This isn't merely a moral stance; it's a strategic one. Consumers are becoming discerningly conscious, often opting for brands that resonate with their personal values. Walmart's ESG adherence aligns with this shift, offering them a distinct competitive advantage.

Looking ahead, the future holds promise and challenges. The path forward for Walmart involves not only expanding its sustainable product offerings but also doubling down on sustainable sourcing.

Partnerships will be crucial, ensuring that every step of the supply chain echoes sustainability. Innovations will play a key role, be it in waste reduction, embracing renewable energy, or pioneering new sustainable practices. As the retail landscape evolves, Walmart's commitment to sustainability ensures it not only remains relevant but also sets benchmarks for others to emulate.
 

Top Marketing Samples

Resources

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