How Walmart Used Psychology to Make $648B in 2024

Familiarity doesn’t just make a brand more memorable and easier to buy.

It also creates the most powerful psychology lever of all - trust.

Walmart is the world’s largest retailer, making a whopping $648B in 2024.

Their mission is to offer “everyday low prices” and they take that promise seriously.

But offering the lowest prices in the market can be a blessing and a curse…

If your price is low, but your quality is low too, your product and brand are seen as low value.

But if your price is low and your quality is high, then your product and brand are seen as high value.

And it turns out most people shop on high value perceptions (a balance of price + quality)…

Not just the lowest price.

One way that people figure out if a product is high quality is by looking for a familiar brand name.

Stephen Quinn, former Chief Marketing Officer at Walmart, put it this way:

“Customers really need the assurance of brands. In the past we were [only] focused on low price…

But low price on what?”

Walmart found they could massively improve value perceptions and overall sales by combining low price with the authority of a well-known brand.

Why?

Because well-known brands are more trusted than off-brands - and buyers use them as mental shortcuts for “quality.”

And when a low price leader like Walmart has a mix of familiar brands and unfamiliar brands in a section like electronics, for example…

The familiar brands give a bit of a psychological lift to the entire category.

It makes Walmart seem like a source for good value, not just low price.

One reason familiar brand names can make an entire store seem high value is down to a principle called Authority Bias.

It says people more easily trust and are persuaded by authority figures.

That could include police, doctors, government leaders, professors, and perceived experts.

Or, in this case, a well-known brand.

I actually saw Authority Bias at work in my own business recently.

I shared a short video that had my diplomas visible in the background.

The video’s total views were about 2x better than normal across YouTube, Instagram, and TikTok…

But that’s not the interesting part.

This video brought in more inquiries about my one-on-one coaching and corporate training offers than ANY of my other videos so far this year.

Authority, like all marketing psychology principles, is NOT one size fits all.

How, when, and what you use to signal Authority will depend on your specific business, industry, brand, and buyers.

If you want to use marketing psychology principles - like Authority - to 2x marketing effectiveness (so sales and profit can 2x, too) the best place to get started is with my most popular course:

“Behavioral Science & Psychology 101 for Marketers.”

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Here’s what Ryan D., one of the learners who took the course had to say about it:

“This course was fantastic. The key principles discussed are not only for marketing, but also to the world of Organizational Development and how to activate and engage team members. Love the course format and the bite-sized learning as well as the resources and templates.”

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Until next time,
Jen

Header image source: billtster - stock.adobe.com