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Walmart Website Screenshot

Screenshot of the main page of the “Chosen by Kids” section of Walmart’s website. 

Retailers these days are able to leverage massive amounts of data from Point of Sale systems, ecommerce websites and the analytics they use to track consumers while on those sites as well as customer loyalty cards, to name a few. This data can be used to help better understand what a consumer is interested in or might be interested in and provide deals and offers to them to help induce sales on a micro level as well as help determine what future demand for different products might be on a macro level. If you’re the largest retailer in the world, this data can provide some very interesting insights about consumer demand and behavior on a level that few other competitors have access to.

Walmart has been able to keep costs low for its consumers through a number of key competencies including the ability to manage efficient supply chain operations through its people, processes, and technology. One of the only companies in the market to be able to truly succeed with an Every Day Low Price Strategy, Walmart has become very adept at ensuring that the right products are in the right place at the right time. Being the largest retailer in the world means access to a truly astounding amount of data. Data that can be used to create interesting opportunities for the organization to be able to better understand what is and is not selling in all of its stores and on its website in order to determine how to adjust its offerings for the future.

Despite the company’s wealth of data, Walmart has in more recent years implemented an interesting, albeit more old fashioned approach to determining how to stock its toy inventories for the holiday season. An article in Bloomberg Businesswek discusses its market research efforts in this regard. Specifically, for the past couple of years Walmart has assembled a focus group of 1,000 kids to try out new toys from manufacturers with the goal of identifying which toys are going to be hot sellers during the holiday season. This year Walmart had its focus groups which in total involved about 1,000 children play with, comment on, and rate over 80 toys from a number of big name manufacturers. From there Walmart took the feedback and ratings and compiled the data into a top-20 list to be used by its buyers as a guide for their holiday season toy purchases.

While no specific quantitative data has been released by Walmart in regards to the effectiveness of this strategy the company’s VP of Toys notes that the children “made great choices.” There’s another side of this approach that’s worth discussing as well which is that this is generating buzz for Walmart and the toys selected. While the toys selected may be in line with what kids actually want this holiday season in terms of specific concepts and themes (for instance, one theme found in the focus groups was that toys that enabled children to use their creativity to produce items were particularly popular), for Walmart there’s a bit of a self-fulfilling prophecy at work here in regards to being able to label specific products as potential top sellers.

The section of the company’s website that has been developed for the top-20 toys list includes a marketing graphic that showcases a picture of a kid playing with one of the toys along with some other images of popular characters as well as the words “The kids voted! See which top toys made the cut.” Those words are presumably a call to action to parents beginning the process of researching their holiday gift selections to see what new toys resonated with children this year. All of the toys selected for the top-20 list are to be given prominent space within Walmart stores and given plenty of real estate online. In addition, the toys will feature a “Chosen by Kids” label in both the physical and digital space. For Walmart another benefit of this strategy is that it will be easier to ensure that the right toys are being purchased and stocked. As a result the retailer should miss out on fewer sales and limit to a greater degree inventory obsolescence, at least in the toy category.

From a marketing management perspective here are some questions to think about:

  • What other categories and situations would this type of market research approach for determining product selection make sense for?
  • What characteristics of Walmart as an organization make this type of marketing research approach a sensible one?
  • What metrics would you use to determine the effectiveness of Walmart’s marketing research for toys? What metrics would you use to determine the effectiveness of the company’s related marketing communications?