Walmart’s Shift Towards Higher-Income Shoppers: A New Focus on Online Sales and Membership Program
In a recent earnings call, Walmart CEO Doug McMillon revealed that households earning over $100,000 accounted for 75% of the company’s market share gains during the fiscal third quarter. This shift towards higher-income shoppers is a strategic move by Walmart as it expands its online assortment, remodels stores, and grows its membership program, Walmart+.
Expanding Online Assortment
Walmart has been investing heavily in its e-commerce business to better compete with Amazon. In Q3, the company’s online sales grew by 10% compared to the same period last year. To attract more high-income shoppers, Walmart has been expanding its online assortment to include more premium brands and products. For instance, it has added over 1,500 new brands to its online marketplace in the last quarter alone.
Remodeling Stores
Walmart is also remodeling its brick-and-mortar stores to create a more modern and convenient shopping experience. These updates include wider aisles, better lighting, and improved signage. Additionally, some stores are now offering expanded pickup and delivery options, making it easier for customers to shop online and pick up their orders in-store or have them delivered to their homes.
Growing Membership Program
Another way Walmart is attracting higher-income shoppers is through its membership program, Walmart+. Launched in September 2020, Walmart+ offers benefits like free delivery from stores, discounts on fuel, and a Scan & Go feature that allows customers to scan and pay for items as they shop in-store using their smartphones. The program is priced at $98 per year or $12.95 per month, making it a more affordable alternative to Amazon Prime.
Impact on Consumers
For consumers, Walmart’s focus on higher-income shoppers means more convenience and a wider selection of products, both online and in-store. The expansion of Walmart’s online assortment and pickup and delivery options make it easier for busy shoppers to get the items they need without having to leave their homes. Additionally, the affordable membership program offers a more cost-effective alternative to Amazon Prime.
Impact on the World
Walmart’s shift towards higher-income shoppers could have a significant impact on the retail industry as a whole. By expanding its online offerings and attracting more affluent customers, Walmart is positioning itself as a formidable competitor to Amazon. This could lead to increased competition and innovation in the e-commerce space, potentially benefiting consumers with more choices and better prices.
Conclusion
Walmart’s focus on higher-income shoppers is a strategic move aimed at expanding its online business, remodeling stores, and growing its membership program, Walmart+. By offering a wider selection of products, more convenient shopping options, and a more affordable membership program, Walmart is positioning itself as a strong competitor in the e-commerce space. This shift could have a significant impact on consumers and the retail industry as a whole, leading to increased competition and innovation.
- Walmart’s online sales grew by 10% in Q3 2021
- 75% of Walmart’s market share gains in Q3 2021 came from households earning over $100,000
- Walmart has added over 1,500 new brands to its online marketplace in the last quarter
- Walmart+ offers benefits like free delivery from stores, discounts on fuel, and a Scan & Go feature
- Walmart+ is priced at $98 per year or $12.95 per month
