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Walmart's winning formula: How the retail giant stays ahead at 63

As Walmart celebrates its 63rd birthday this year, the retail giant continues to differentiate itself through data capabilities, technological innovation, and a willingness to experiment with new strategies.

"I think they're at this intersection of so many different categories, all in one place," said our analyst Suzy Davidkhanian on a recent episode of the "Behind the Numbers: Reimagining Retail," highlighting Walmart's comprehensive approach to retail that spans from grocery to fashion to financial services.

The company's evolution comes at a pivotal moment as both Walmart and Amazon launch their summer sales events. Here's what's driving Walmart's continued success and what other retailers can learn from its approach.

Data capabilities form the foundation of Walmart's strategy

Walmart's vast data ecosystem—built from its membership program, omnichannel experiences, and diverse product categories—represents approximately 50% of its competitive advantage, according to Davidkhanian.

"They're using that data to then refuel back into their system, their retail media component, where they're making high-margin dollars on our data," she said. This data infrastructure is particularly crucial for Walmart's retail media business, which needs to attribute online advertising to in-store sales.

Our analysts say the company's ability to harness customer information across physical and digital touchpoints enables personalization, targeted recommendations, and strategic membership offerings that keep customers returning.

Technology investments keep Walmart ahead of competitors

Approximately 30% of Walmart's success can be attributed to its technological capabilities, per the episode, which span from AI-powered customer assistance to advanced fulfillment systems.

Walmart recently launched Sparky, an AI assistant that appears as a smiley face in the app to help customers with shopping tasks. Unlike Amazon's Rufus, which focuses primarily on product information, Sparky functions as a general-purpose assistant that can answer broader questions about weather or sports while making shopping recommendations.

"It's one level further along than Rufus," Davidkhanian noted. "[Sparky] helped me plan a one-year-old's unicorn-themed birthday party… This is that next level."

The company has also completely redesigned its delivery system using what they describe as advanced geospatial technology.

"The idea is to optimize delivery, so that they can map delivery areas more accurately and get orders to consumers faster," said our analyst Rachel Wolff. "By doing this, I think they said 12 million more customers now have access to faster delivery."

Grocery and value proposition remain core strengths

Walmart's grocery business accounts for approximately 40% of its success, according to Wolff, serving as the primary driver that brings customers into stores and creates opportunities for additional purchases.

"It just gets people into the store, and that is the opening point for all of the other incremental sales they can drive for general merchandise," she said.

The company's value strategy—including its ability to pressure suppliers to keep prices low and its strong private label offerings—represents another 40% of its competitive advantage, our analysts say. This focus on affordability has helped Walmart attract a more economically diverse customer base, with high-income earners now representing its fastest-growing cohort.

What other retailers can learn from Walmart

There are several Walmart strategies that retailers should consider:

1. Experiment with technology without fear of failure. Walmart's willingness to test new concepts, from AI assistants to drone delivery, keeps the brand innovative and relevant.

2. Know your core customer but remain open to adjacent opportunities. Walmart has maintained its value focus while expanding into higher-end offerings to attract new customer segments.

3. Form strategic partnerships that can introduce your brand to new audiences. These collaborations can help retailers reach customer segments they might otherwise miss.

"Everybody's pockets are different depths, but I think that you can experiment," said Davidkhanian. "You don't need to throw money at something. You can just do A/B testing or do consumer research, and ask customers where you can bend more or try new things."

Listen to the full episode.

This article was prepared with the assistance of generative AI tools to support content organization, summarization, and drafting. All AI-generated contributions have been reviewed, fact-checked, and verified for accuracy and originality by EMARKETER editors. Any recommendations reflect EMARKETER’s research and human judgment.

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