How Walmart’s Digital Strategy Impacts BrandsOctober 05, 2020 - by Taylor Getler
For most national CPG brands, Walmart is a key retail partner that plays a major role in getting products to customers. Now that Walmart is making significant moves in digital and ecommerce innovation, brand leaders need to understand how these rapid changes will affect their own decision-making in the future.
Walmart+ Has Already Captured 11% of American Shoppers
Walmart’s new premium membership service parallels the Prime model offered by its competitor Amazon, allowing customers to pay a flat annual fee of $98 in exchange for unlimited free delivery (on orders over $35), one-hour and same-day delivery times, and mobile scan-and-go. According to some reports, Walmart may have already overtaken Amazon as the top online food retailer. Considering the fact that Walmart+ has already convinced 11% of American shoppers to join its service, Walmart could quickly secure its lead as the most important ecommerce channel for brands to follow.
Walmart has also been experimenting with the concept of personalized online stores for the past two years via Walmart.com. The site offers items that are specifically tailored to customer needs, such as a plant-based e-store that encourages users to “Build a plant-based pantry.” This aligns with recent research that has found that online shoppers are largely need-focused in their search terms, and very rarely ever include specific brand names. We imagine that this kind of personalization is going to carry over and expand with Walmart+, becoming even more specialized as the new site gathers data on individual shopper behavior and buying patterns.
The implications of this could completely change the way that CPG brand leaders think about their competitors. For example, a vegan cookie brand is no longer vying for customer attention against non-vegan offerings in the cookie aisle – rather, they’ll be going up against all vegan snack brands that Walmart carries, all lined up together. This means that brand leaders will have to get more creative and forward-thinking when it comes to claims, callouts, and other distinct elements that can help them stand apart from alternatives. Further, Walmart’s growth in personalized ecommerce could also give brands more accurate and holistic data for their shopper insights, which could lead to more innovative products that are better at delivering on consumer needs and preferences.
Walmart’s New Store Design Integrates eCommerce Capabilities
Walmart also announced that they are redesigning 1,000 stores and 200 Supercenters to blend the online and in-store shopping experience. This shift already started earlier this year with the merging of the ecommerce and in-store buying teams into one unified division. Key design changes highlighted by Walmart in its official press release include upgraded signage and navigation (inspired by the design and layout of the app), product/department spotlighting, and contactless checkout and payment options.
A fully integrated online and in-store experience is important for Walmart’s plan to win over Amazon, allowing them to offer “the best of both worlds” in a seamless and convenient way. Walmart continues to prove that while grocers need to have great ecommerce services, it still pays to have a physical presence that can satisfy consumers any way that they want to shop.
For brands, Walmart’s new initiative to highlight specific products could become an important way to drive sales and gain new customers. Brands should also consider how Walmart’s new in-store wayfinding system might impact consumers’ regular shopping routines, and how that might affect how and when they find their products during the shopper journey.
As Walmart continues to invest in their ecommerce capabilities, brand leaders will need to pay close attention to how these changes will impact their business. Walmart is a leading retail partner for many national CPG brands, and the company’s digital strategy could set significant new trends and expectations across all ecommerce platforms going forward.