Wal-Mart Gears Up for Holiday Sales with Social Media

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Wal-Mart Stores, Inc. (NYSE:WMT), the largest retailer in the world, is gearing up to use social media as a sales tool better compete for holiday discount shoppers’ dollars with competitors like Target (NYSE:TGT) and Costco (NASDAQ:COST). The retailer is using its official Twitter feed to feature “Walmart Specials” during the holidays. It is also posting shopper-friendly information on its Facebook page. And the company is engaging in cause-related marketing on Facebook by donating $1.5 million to charities through its “12 Days of Giving” campaign. [1]

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Redefining Business Model in Social Media Age

It’s no secret that the proliferation of social media is changing the way that people shop while creating new opportunities for companies to take advantage of the ability to quickly share information and amplify trends on the platforms. In that vein, Walmart last spring bought Kosmix, a social media start-up in Mountain View, Calif., to extend its social e-commerce capabilities. The company specializes in filtering and organizing online content from Web sites, Twitter messages and blog posts in real time—something that could provide Walmart with new ways to give customers information and to receive their feedback.

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Happy Holidays Ahead?

According to the National Retail Federation, in our still-sluggish economy holiday sales are expected to increase a very modest 2.8%, or about $465.6 billion, over last year, raising the stakes for the crucial Christmas shopping season. If digital analysis firm Socialbakers’ recent findings carry weight, Walmart is the retailer likely to benefit most from increasing numbers of consumers looking online for holiday deals. It has the most social media fans of any major retailer (over 10 million) and nearly double the number who actively interact with public comments. [2]

Beyond the holidays, Walmart will continue to open new U.S. stores at a far faster pace than its competitors (two-thirds of its sales are domestic), and to make headway into fast-growing developing markets like China, India and sub-Saharan Africa. Everything considered, Walmart shares appear to have healthy upside potential. Trefis estimates the stock’s fair value around $73, a 25% premium over the current market price.

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Notes:
  1. Walmart Launches ’12 Days of Giving’ Campaign on Facebook, Walmart press release, Nov. 14, 2011 []
  2. Walmart Tops US Retailers In Social Media Stakes for Black Friday Holiday Sales, Socialbakers, Nov. 21, 2011 []