How Walmart Customer Loyalty Is Rising to the Top

January 20, 2020 CCG Retail Marketing Blog

See how Walmart CRM strategies are helping the chain battle back against Amazon for retail loyalty supremacy — and what you can learn from their efforts.

By Sandra Gudat, President/CEO

Mom Shopping with Young Son for Cloths.

Article Highlights

  • Walmart customer loyalty stems from a guiding corporate mission.
  • Cash back cards help the chain build customer loyalty.
  • Added services put the store’s customers at center stage.
  • Upgrades focus on the Walmart customer experience.
  • Plus: Four takeaways any retailer can leverage.

Walmart doesn’t officially have a customer loyalty program. A notable portion of U.S. consumers don’t even like the retail behemoth, finding particular fault with its customer service, according to a RetailDive article. Yet Walmart has crept to the top of the loyalty leaderboard, surpassing even widely-adored Amazon by some reports.

In fact, in our own 2019 Retail Customer Loyalty Study, Walmart moved from second to first place, just ahead of Amazon, when we asked consumers where they tend to shop exclusively for particular needs. And when Business Insider researched retail chains with the most dedicated customer following, Walmart again ranked number one.

So how are they doing it? Read on for insights on several key factors driving Walmart customer loyalty success.

Walmart customer loyalty stems from a guiding corporate mission.

Amazon famously boasts that customer obsession, not competitive focus, is one if its four guiding principles. Keeping this value top-of-mind in all they do has helped propel their popularity. Likewise, Walmart has a dedicated customer focus — although theirs is specifically to the customer’s bottom line.

Forbes notes that, in founding the store in 1962, Sam Walton had one simple goal: to “help people save money so they could live better.” Nearly six decades later, the chain remains true to that mission in everything it does, helping to cement customer loyalty. As Forbes goes on to note, by saving people money, Walmart helps make available funds for them to do other things (like pay for childcare or car repairs). That brings people back to Walmart and ultimately helps the profit-loss statements. Wins all around.

Takeaway #1: If you don’t have one, create a mission or core purpose for your company. Make sure it’s focused around the customer and the gaps you can fill in their lives. Then keep it front and center in all you do.

Cash back is a customer loyalty builder.

Walmart customer loyalty strategies also include offering three cash-back rewards card options, allowing customers to not only save money, but also make money by shopping the chain. The card rewards programs began life as the 3.2.1. Save program in 2016, but that moniker seems to have dropped out of use. Nonetheless, all of the cards follow a basic structure offering 3%, 2% or 1% cash back depending on where purchases are made or the type of purchase made.

The Walmart MoneyCard is a prepaid debit card that offers cash back on purchases made with the card at Walmart.com, Walmart stores or Walmart/Murphy USA fuel stations. Customers can deposit cash to the card or associated mobile app multiple ways, including paycheck direct deposit. They can also stash money they don’t want to use in the Vault (a free savings account feature associated with the MoneyCard), simultaneously earning entries into a sweepstakes with cash prizes. And they can use the card or app to pay bills.

The Walmart Rewards Card credit card and Capital One Walmart Rewards Card credit card are both standard cash back cards. The Walmart-branded card can be used only for Walmart purchases, while the co-branded card can be used (and earn cash back) anywhere that MasterCard is accepted. At the time of this writing, both were offering an introductory offer of 5% cash back for 12 months for purchases on either card made using Walmart Pay (see below).

Walmart also participates with Fetch Rewards, a hotly trending app with 3 million downloads and a 4,323% three-year growth rate as of summer 2019. Among other features, it allows users to earn points and redeem them for rewards, including Walmart gift cards.

A former Walmart program, called Savings Catcher, was discontinued in May 2019. It had allowed customers to compare prices between Walmart and other retailers on specific items. If the Walmart price was higher, customers would get a rebate for the difference and could use the funds for Walmart purchases. Essentially, Walmart said the program served its purpose by confirming that Walmart typically has the lowest prices.

A notice on the company website states, “What we’ve learned through Savings Catcher is that our efforts to lower prices upfront on thousands of items across our stores is working. Walmart’s prices win most often when you submit your receipts, which tells us that the program’s intent has been met.”

Takeaway #2: These Walmart CRM strategies prove you don’t need a loyalty program to build strong, profitable customer relationships. Providing valuable information, setting up personalized alerts and notifications, and offering niche clubs are just a few additional ideas to ramp up loyalty. Read more here.

Added services put Walmart customers at center stage.

Walmart is playing Amazon’s own game with several other services and features that focus on the customer — in terms of money savings, convenience or both.

  • With next-day delivery on more than 200 items at Walmart.com, plus two-day shipping for more than 2 million items, the discounter is offering Amazon-level service at a savings. Both shipping features are free for orders above $35 — without the $119 Prime membership fee that’s needed for Amazon’s free next-day delivery. (Granted, Amazon has no minimum purchase requirement.)
  • Walmart also offers the popular purchase online/pick up in store feature, with handy self-serve Pickup Towers in stores, as well as free grocery pickup and delivery. The store has also extended the service to third-party sellers offering items through the online Walmart marketplace.

Sure, Amazon offers in-person pick up through its Hub Lockers, Counter, Kohl’s and at a limited number of Rite Aid stores. But with a Techcrunch.com article noting that 90% of Americans live within 10 miles of a Walmart, we think they get the win in this convenience scrimmage.

  • As another customer convenience feature, Walmart is playing straight to today’s smartphone-addicted consumers with its Walmart Pay app, which allows customers to purchase items with their phones. Funds can be loaded to the app from store credit, Walmart gift cards or debit cards.

Takeaway #3: Pay attention to your competitors — in particular, what they’re doing to win and keep customers. Steal what you can — what makes sense for your organization and your customers. Then look for gaps they’ve left that you can fill. Learn more about the factors driving high customer loyalty in a special report from our Retail Customer Loyalty Study.

Innovation and improvement focus on the Walmart customer experience.

Walmart has taken a proactive stance in strengthening what many see as its greatest weakness — customer service. And as every retailer knows, that starts with happy, well-trained employees.

Not only did Walmart increase wages to a minimum $11 per hour, but the chain also introduced a $100 million Retail Opportunity Initiative meant to offer employees greater education opportunities, improve training programs and assist with career advancement within the organization. Through the Walmart Academies, associates even get virtual reality-based training.

Here are a few other innovations Walmart has introduced to make life easier for associates and customers, helping pave the way to greater customer loyalty:

  • Check Out With Me is a feature that allows associates to use cellular devices and Bluetooth printers to checkout customers from anywhere in the store, even providing a printed, texted or emailed receipt.
  • Dotcom Store is an app that lets associates help in-store customers shop on Walmart.com for items that are out of stock at the store.
  • Store maps on the Walmart app are customized for individual stores and let customers locate anything on the sales floor.

Recently, Walmart has shown it isn’t afraid to break out of the big box mindset and try something radically different. “Walmart Reimagined” positions itself as a town center concept that would revamp parking space around select Walmart stores for mixed-use purposes, including green space, recreation, entertainment, wellness, restaurants and a “carefully curated” mix of retailers.

In essence, the town centers would shift these Walmart locations from mere discount stores to community gathering spots. In part, at least, the concept is designed to attract a more millennial demographic and appeal to urban exiles to suburbia who miss the amenities of downtown living. What isn’t clear is how the Town Center idea will support Walmart’s driving mission of helping customers save money — and how that will impact customer loyalty for long-term devoted fans of the chain.

Takeaway #4: Even if you have a dedicated, loyal base, don’t rest on your laurels. Never stop brainstorming and implementing improvements and innovations that work to build customer interest, engagement and loyalty. Conducting a loyalty audit can help you identify opportunities for improving your CRM strategies.

How to follow the Walmart customer loyalty lead.

Although it may not seem encouraging that one retail giant has surpassed another for customer loyalty, there are lessons to be gleaned here for retailers of any size. Having a mission that matters to both your organization and your customers, and following through on it in every aspect of what you do, is a great place to start. Then keep the ideas churning and don’t be afraid to break out of your own box and experiment a little. Yes, it takes time and resources. But when the payoff can be leaps forward in customer loyalty (and thus long-term profitability), the investment is well worthwhile.

If you’re ready to push your customer loyalty to new heights, connect with CCG. Our retail marketing experts have specialized in helping businesses grow and maintain profitable customer relationships for more than 40 years. We offer a full slate of retail marketing solutions, as well as special services such as our Loyalty Program Effectiveness AppraisalTM and Statistical Loyalty Program OptimizationTM — all designed to help you maximize your customer’s loyalty. Schedule a free consultation or call 303.986.3000 today to get started.

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