Walmart's Omnichannel Strategy Keeps It on Top
Leading retailers use big data to anticipate and respond to shoppers' needs and wants and to personalize the shopping experience for consumers, brand consultancy Interbrand stated in its recently released annual "Best Retail Brands" report.
According to the firm's rankings, the brands that have gained the most value are developing a strategic understanding of sales and customer data so they can meet customer needs and desires better and faster than ever. They're also expanding beyond their core businesses to stay relevant to changing customer demands and are bridging the gap between their brick-and-mortar stores and online and mobile shopping options. These retailers offer multichannel and omnichannel options when it comes to sales, marketing, and customer service.
Walmart, the world's largest retailer, with approximately 11,000 stores in 27 countries and 2013 revenue of roughly $466 billion, is "going in the right direction in trying to reach customers wherever they want to engage with them," says Rhonda Hiatt, executive director of strategy and analytics at Interbrand. Walmart, she says, "has put a lot of investment" not only in its stores but also in building a strong online and mobile presence to keep up with the 10 percent annual growth rate of U.S. online shopping.
Beyond that, Walmart, which ranked number one in Interbrand's report, has also "always been ahead of what's happening" with its customers, Hiatt says.
But despite its strong lead, Walmart slipped a little in this year's rankings, dropping 6 percent. It lost ground to Amazon (whose value jumped 27 percent in the past year), Target, Macy's, and dollar stores.
"You can never discount Amazon by any means," Hiatt says.
Amazon and other online-only retailers are increasingly creating real-world interaction with customers, with such formats as pop-up shops, showrooms, and kiosks to enhance the overall customer journey, Interbrand reported.
Target, the world's number-two retailer in the Interbrand rankings, "is doing a great job with its new cartwheel approach that integrates digital into the in-store experience," Hiatt says, "engaging shoppers in ways that are very relevant."
Macy's in particular advanced in the rankings on the basis of its ability to respond rapidly to shoppers' new digital behaviors. The department store, which brands itself as "America's Omnichannel Store," has adopted a digital hybrid model that relies on technology to create tailored shopping experiences.
The report singled out the home improvement sector as one that has done an exceptional job with omnichannel marketing, especially in social media. Stores such as Lowe's and Home Depot have created social communities where consumers can get help planning and buying for projects. Shoppers are encouraged, inspired, and supported with service and instruction.
When it comes to effectively using mobile applications, the drugstore sector, fronted by CVS/pharmacy and Walgreens, leads the way. These brands make it easy for customers to fill prescriptions, shop by smartphone, manage rewards programs, or send pictures to in-store photo centers for printing. Customers who engage with Walgreens online and via mobile applications spend six times more than those who only visit its stores, according to Interbrand's research.
Interbrand CEO Jez Frampton explains that "from mobile shopping to virtual fitting rooms," the world's most valuable retail brands are looking at the customer journey through a digital lens.
"Adapting retail formats to accommodate the shift in consumer preferences for e-commerce is proving to be the key to success for many retailers worldwide," Frampton said in a statement. X"Retail brands must be more agile, flexible, and responsive than ever before. The winning retail brands will not only survive the continuous shift to digital retail, they will become more extraordinary because of it."
Where poorly performing retailers have gone awry, Hiatt adds, is in focusing solely on improving their digital footprints. "Omnichannel is not just digital," she says. "Digital is certainly a component of omnichannel retail, but it's not the only channel.
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