Walmart: High-tech retailer
Walmart is not only the biggest retailer in the world it is also the most advanced, technologically speaking. In this article, we will take a closer look at how technical excellence has helped the company grow into the world's largest and arguably the world’s best retailer.
Walmart, started by Sam Walton shortly after World War II, has through most of these years been at the forefront on using up to date technology. Today, the company is not only a traditional discount retailer but also a high-tech giant.
The company’s success is the result of a combination of strategic technology investments, innovative logistics, and a data-driven approach to customer experience and operations.
Technological development and innovation
Walmart has long been a pioneer in using technology to streamline operations. As early as the 1980s, the company began implementing Universal Product Codes (UPC) to standardize merchandise management.
This was followed by the development of one of the most sophisticated supply chain systems in the retail industry, including satellite communications to connect stores and distribution centers.
Walmart has its own private satellite network, which was established in 1987 with a $24 million investment, according to India Retailing. This network enables seamless communication between Walmart's headquarters, distribution centers, stores, and suppliers. It uses Ku-band satellite transmission to facilitate data transfer and management communication
In recent times, Walmart has invested heavily in cloud computing, artificial intelligence (AI), and automation to improve efficiency. The company has developed advanced algorithms for inventory management, predictive analytics, and dynamic pricing, giving it a competitive advantage in an increasingly digital marketplace.
To face competition from Amazon and other online retailers, Walmart has adopted an omnichannel strategy. This involves seamless integration between physical stores and digital platforms, allowing customers to shop online and pick up items in-store or have them delivered to their homes.
Data-Driven Decision Making
One of the key factors behind Walmart’s growth is its data-driven approach. The company collects vast amounts of data from its stores, websites, and mobile apps, and uses advanced analytics to optimize inventory, pricing strategies, and customer experience.
Using artificial intelligence, Walmart can predict demand and adjust inventory in real time. This reduces waste and ensures that popular products are always available.
The company has also implemented personalized marketing, where customers receive tailored offers based on their purchase history and preferences.
Global expansion and market dominance
Walmart has used its technological expertise to expand internationally. The company now operates over 10,700 stores in 19 countries and has a weekly customer base of 255 million people. Some experts argue that Walmart is not a retailer, primarily it is a logistic machine. The company's growth has been driven by a combination of low prices, a wide product range and an increasingly efficient supply chain.
Hower, Walmart has faced criticism for several reasons, including its impact on local economies, treatment of workers, and business practices:
Effect on Local Businesses: Walmart's expansion has led to the closure of many small, locally owned stores that struggle to compete with its low prices and massive scale.
Worker Treatment: The company has been criticized for low wages, limited benefits, and harsh working conditions. Many employees reportedly rely on government assistance to make ends meet.
Shopping Experience: Some customers feel that Walmart's stores are overcrowded, poorly maintained, and offer a frustrating shopping experience.
Market Dominance: Walmart's sheer size gives it significant power over suppliers and competitors, leading to concerns about monopolistic practices.
Despite these criticisms, Walmart remains the largest and most successful retailer in the world.
The future of Walmart as a technology company
Walmart continues to invest in technology to strengthen its position. The company recently announced plans to hire thousands of technology specialists to develop innovative solutions in cyber security, artificial intelligence, and automation. To draw top talent, the company has built a new $1bn office in Bentonville that will feel familiar to tech guys accustomed to Silicon Valley campuses.
Walmart's development as a high-tech company has been crucial to its rapid growth and global dominance. By combining innovative technology, data-driven decision-making, and an efficient supply chain, the company has created a retail model that is difficult to compete with.
With continued investment in technology and sustainable solutions, the future looks bright for Walmart as the world's largest retailer. So, think the financial investors too. The price of Walmart shares are forty times annual earnings. That is higher multiple than most tech giants, including Alphabet, Apple, Meta and its arch-rival, Amazon!
Walmart in numbers
- Revenue: $650 billion globally in 2024
- Number of Stores: 10,660 worldwide, with 5,205 in the U.S.
- Profitability: Walmart reported a gross profit of $158 billion for the fiscal year 2024 and 15,5 billion in net profit.
- Employees: 2.1 million people globally.
Sources: Walmart, NHH FOOD, Economist, India Retailing.