What Hotels Can Learn From Walmart
December 7, 2016 7:00am
By Larry Mogelonsky, MBA, P. Eng. (www.lma.ca)
Years ago, and well before my hotelier days, I traveled to Bentonville, Arkansas selling ergonomic furniture, mouse pads and the like. The Walmart offices were huge then and I can only imagine how much they have grown since. Today, Walmart is the world’s largest company by revenue ($288 billion) and employees (2.2 million), rivaling the GDP of many nations, including some that are traditionally defined as first-world.
What’s most interesting to me is that hoteliers, by and large, have never really looked to this retail titan to see what they can glean. Perhaps it’s a stigma whereby Walmart is perceived as ‘beneath us’ or that a discount retailer is totally unrelated to our heads-in-beds raison d’être. In any event, here are a few initiatives that Walmart does exceptionally well that should be on our radar.
1. They advertise. Walmart did not grow on its own. They are among the world’s heaviest TV ad buyers. Their recognition had been bought through countless GRPs (gross rating points) of continual media buying. Many hoteliers these days, I’m afraid, do not consider advertising – broadcast or digital – as a major component of their brand support program.
2. They have not diluted the brand. Just two names – Walmart and Sam’s Club – seem to work for 11,500+ outlets. They do not create ‘lifestyle’ property categories or other sub-brands on a marketing whim. A chain with 18-20 brands is going to have a challenge with any sort of clear recognition or differentiation.
3. A strong environmental commitment. Walmart has universally adapted LED lighting as just one of the green conscious approaches they have taken. Apart from the lucrative financial ROIs, they are leading the way for other companies.
4. One, unswerving consumer strategy. “The lowest price is the law.” Remember this statement? It is hammered in through their advertising and followed up in-store. By having a single-minded focus, both the company and the consumer are on the same wavelength. Most hotel plans that I’ve read have trouble distilling the strategy down to a half-dozen unique or semi-unique approaches.
5. The masters of data. Walmart knows their POS data in real-time. They manage inventory down to the store level and can refill stores to meet on-shelf requirements effectively. Do you know who exactly is staying with you tonight? Last night? Tomorrow night? How about 365 days from now?
6. They have greeters. Comedians like to make fun of the Walmart greeter program. But, they serve a valuable purpose in reassuring the customer and helping out at the store entry. It’s part of the brand guarantee to service the consumer as best possible. Ever consider having a greeter standing out in the open in the hotel lobby instead of sequestered behind the physical barrier that is the front desk?
7. They test and they plan. New items just don't appear across all stores; they are tested in store panels to ensure their success. Shelves are planned with perfect store-to-store consistency. With hotels, there is much more variation across each chain, and while the parallel might be considered a bit of a stretch, standards must nevertheless be adhered to, or at least suitably adapted to meet regional quirks and demands.
These are just a few that I have come up with. Can you add any more relevant practices that have hospitality applicability?
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Editor’s note: To discuss business challenges or to discuss speaking engagements please contact Larry directly.
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One of the world’s most published writers in hospitality, Larry Mogelonsky is the owner of Hotel Mogel Consulting Limited and founder of LMA Communications Inc., an award-winning marketing agency based in Toronto. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Larry is also a principal of Cayuga Hospitality Consultants and is on several boards for companies focused on hotel technology. His work includes three books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013) and “Hotel Llama” (2015).
You can reach Larry at firstname.lastname@example.org to discuss hotel business challenges or to book speaking engagements.
Contact: Larry Mogelonsky
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