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Customer Experience Lessons From Walmart

Former Walmart CEO Lee Scott discussed the changing consumer landscape, and the big box store's foray into financial services, at BAI Retail Delivery 2013.

Knowing what is happening in a customer's life is imperative for any business to be successful these days, especially so in financial services, says Lee Scott, former president and CEO of Walmart.

Scott, speaking during a keynote session this week at BAI Retail Delivery 2013 in Denver, also stressed that being relevant to a customer does not mean being overbearing. He used the example of a bank that had sent him information regarding a specific financial product multiple times even after he had not expressed an interest.

"Customer service and trying to push something on someone is different," says Scott. "If communications with customers are not meaningful, not only will they tune you out, but they may move to someone more relevant."

In Walmart's case, that means knowing the demographics of its customers. Even though the big big box store is known for its low prices, Scott says a Walmart in an upscale suburb of Dallas, for example, wouldn't emphasize bargain-priced items in every endcap, because a customer there likely "wouldn't feel like they are opening price point customers."

Scott also discussed the effect Amazon and the rise of online retailing has had on Walmart, and how that parallels with increasing competition banks face from non-traditional competitors in payments and other areas. One such competitor, in fact, is Walmart, which offers financial services including check cashing and wire transfers. The chain this year also introduced Bluebird, a new product in partnership with American Express that is designed to be an alternative to debit and checking accounts. Bluebird is an American Express-powered card that is available online and at more than 4,000 Walmart stores.

[Related Content: Walmart Takes on Banks]

Scott says Walmart initially got into offering check cashing and wire services to aid its large Hispanic immigrant customer base, who typically used independent check cashing businesses that charged 6-10 percent for its services. Walmart charges 3 percent for check cashing services.

The idea for Bluebird also came from serving this customer base, whom Scott described as those likely to pay mostly in cash during their weekly shopping at the store.

Interestingly, Scott says he does not see Bluebird as potential disintermediation for banks, but rather as something that will drive more consumers to banks.

The typical Bluebird customer, "is unbanked," notes Scott. "We've converted a number of them to Bluebird and it has been good. They're in the financial system now, and ultimately I think that's better for the people in this room, because those people will migrate from Bluebird to banks."

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/14/2013 | 7:01:22 PM
re: Customer Experience Lessons From Walmart
Walmart is a unique position because they have a lot of money to spend on innovation clearly, and are beginning to build a brand in financial services with the success so far of BlueBird. I would suspect that most banks would love to have as much money to invest in innovation while they have to dedicate so many resources to compliance and regulations.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/14/2013 | 6:59:30 PM
re: Customer Experience Lessons From Walmart
Yeah those underbankd customers who pay a lot to cash checks represent a big opportunity for banks, and for any other organization that wants to build a business in financial services.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/14/2013 | 6:58:09 PM
re: Customer Experience Lessons From Walmart
One of the major themes that I saw at BAI was customization of different kinds of digital banking services, and a lot of that customization was based on customer segmentation. Banks are beginning to realize that different customer segments desire different online and mobile banking experiences. It seems like Walmart is already ahead of the banks on that though.
Byurcan
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Byurcan,
User Rank: Author
11/14/2013 | 3:28:01 PM
re: Customer Experience Lessons From Walmart
Yes that kind of innovation has helped it against the "disintermediators" (like Amazon) and makes can definitely learn a lesson there.
Kelly22
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Kelly22,
User Rank: Author
11/13/2013 | 4:34:13 PM
re: Customer Experience Lessons From Walmart
The article mentions that Walmart has created a mobile app that switches to in-store mode to help customers find what they need and access digital coupons. Customers can also scan items while they shop for self-checkout.

To me, that definitely shows commitment to improving the customer's ability to find and purchase goods without getting lost or waiting in line. It's as if the customer is shopping online, but immediately obtaining their goods in-store.
Nathan Golia
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Nathan Golia,
User Rank: Author
11/12/2013 | 9:40:48 PM
re: Customer Experience Lessons From Walmart
I haven't been to Walmart in a long time, but a MetLife exec that initiated the insurer's Walmart partnership told me there are multiple places around the store where customers can use kiosks to find the right product for them. Walmart clearly sees the value of screens to improve and enhance retail. Is there an option for financial services to do the same? Banks already have ATMs... what could be added there?
Guest
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Guest,
User Rank: Apprentice
11/12/2013 | 1:10:14 AM
re: Customer Experience Lessons From Walmart
I hadn't seen that article, thanks for sharing. As organizations get bigger and acquire more customers, they absolutely have to use these digital tools to personalize the customer experience. That's the only cost-effective way of even coming close to delivering mom-and-pop shop levels of service.
Zarna Patel
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Zarna Patel,
User Rank: Apprentice
11/8/2013 | 8:25:27 PM
re: Customer Experience Lessons From Walmart
3%?! That's an amazing rate to get charged for cashing checks. Over the summer, I read an article in the economist regarding banks not allowing customers to open accounts with them so a number of people get their checks cashed and pay a really high rate. Clearly someone at Walmart read that article as well!
KBurger
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KBurger,
User Rank: Author
11/8/2013 | 8:19:12 PM
re: Customer Experience Lessons From Walmart
Did you see the article that appeared recently (NYT) about how Walmart now has an office in Silicon Valley and is trying to attract top talent in areas such as analytics and mobile development, since they feel that their digital presence definitely needs to be upgraded? If nothing else it shows that this is a smart organization that is aware of what is coming and that they need to step it up. I think Scott's remarks show that "customer experience" is extremely amorphous and it is risky to a) generalize and b) assume that the definition of a good quality experience are the same for all kinds of cusotmers.
Byurcan
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Byurcan,
User Rank: Author
11/8/2013 | 7:43:00 PM
re: Customer Experience Lessons From Walmart
Very true, banks are playing catch up to the likes of Walmart and amazon when it comes to effectively mining customer data.
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