Walmart+ and The “New Walmart”
Walmart has realized some success with its new Plus membership, with early reports showing in the 45 days following launch, the membership has reached over 17% of US consumers. In early December, Walmart expanded its Plus membership benefits to include free shipping from Walmart.com with no minimum. This new benefit puts Walmart in direct competition with Amazon Prime’s core offering and gives members the ability to purchase from a catalog of nearly three million items to ship in 2 days or less. With this improved list of benefits, Plus is expected to reach over a quarter of US consumers by early 2021. An added benefit is that Walmart+ gives the retailer an advantage in demographics where it has historically struggled to gain penetration; the membership over-indexes in both millennial (32%) and those making over $100K/year (22%).
Walmart is making some big investments in their new membership program, but there is still a lot of upside for the program to grow and become a competitive alternative. The data coming in on Walmart digital shows that premium seeking customer purchasing is growing on the platform and should not be ignored. While the popularity of Walmart’s digital offering continues to grow, brands need to consider if they are positioned to not only experience this growth but influence it.
Walmart’s Sustainability Goals and How to Prepare
Walmart’s commitment to reach zero emissions without using carbon offsets by 2040 made headlines in September of last year. To accomplish this, the global retail giant laid out a number of micro-goals including:
- Powering facilities with 100% renewable energy by 2035
- Using electric vehicles to “zero out emissions”, including long-haul trucks, by 2040
- Using low-impact refrigerants for HVAC by 2040
- Preserving at least once acre for everyone developed by the company in the U.S.
- Pushing regenerative agricultural practices, sustainable fisheries and forest protection and restoration
- Working with suppliers to source from “place-based efforts’ designed to preserve ecosystem and improve livelihoods.
With these goals shaping 2021 decisions, brands should be having conversations to review their supply chain footprints and communicate with Walmart to ensure they’re on the right track to maintain digital and brick and mortar shelf space.
COVID-19 and Retail in The New Year
Cases continue to surge causing another wave of “non-essential” business closures. Even with the rollout of a new vaccine, manufacturers can expect pandemic-driven trends to intensify and most consumers still have reservations about shopping and going out to eat. According to new surveys from Shopkick and ACI Worldwide, 48% of consumers reported being more concerned about the coronavirus in November than in the month prior.
COVID-19 has propelled digital commerce forward several years and created worldwide trends that will influence the retail industry for years to come. Although the future of the virus this winter cannot be predicted, brands and retailers can optimize their offering to buffer against further industry disruptions. While we are in the midst of another spike and possible further shutdowns, brands must ask if their teams are prepared for more supply chain disruptions and a heavier focus on digital channels to reach customers.
E-Commerce Dominated “Cyber November”
Early reports show this year’s Cyber Monday as the largest online shopping day in U.S. history with a record $10.8 billion spent in a single day. Initial Walmart reports have the box giant coming in at $69 million. While not as drastic as forecasts initially reported, in a month where retailers rolled out sales earlier and earlier (due in part around anxiety around shipping delays) the traditional week of sales held around Thanksgiving were dominated by online shoppers. In fact, 39% of sales on Cyber Monday were placed on mobile devices. It wasn’t just Black Friday and Cyber Monday that drew digital shoppers out, with early sales and promotions, the week leading up to Thanksgiving saw 80% growth in digital sales globally. The concerns around delayed shipments have turned out to be well founded. Consumers have proven that retailers with flexible infrastructure for omnichannel marketplace and last-mile delivery services are continuing to win in this space.
The holiday season has brought an increasing number of first-time dot.com purchasers to Walmart.com and the big box giant has shown increased flexibility and strategy around last-mile delivery options and same day pickup. Brands should ensure their online strategy can match pace and be included in Walmart’s innovations.
Did You Know?
- 35% of consumers are brand loyal because their brand of choice is easier to purchase on e-commerce.
- For the first time this year desktop share of e-commerce beat out mobile but is now on the decline.
- Consumers visited Walmart.com 720 million times in November 2020
- 43% of Walmart traffic is driven by product search on Google and other major search engines.
- Mobile commerce via social media is shaping up to be an emerging channel with projections of it reaching $102 billion by the end of 2020.
- Stay ahead of the curb. Salesforce has forecasted that 10% of mobile orders will be through social media channels. They have predicted the peak days could reach between 12%-15% of mobile orders.