Check out the collection of pictures here!

PRINTABLE VERSION HERE

As of 2022, Walmart accounts for 10,585 stores in 24 countries, operating under 46 different names in the United States, Canada, Mexico, Central America, India, China and South Africa to name a few. Walmart is the world's largest company by revenue, with about $570 billion in annual revenue, according to the Fortune Global 500 list (Amazon comes second). It is also the largest private employer in the world with 2.2 million employees. Walmart was the largest United States grocery retailer in 2019, and 65% of their sales came from U.S. operations.

To keep its position and secure recurring customers, Walmart started a transformation before Covid to offer in-store seamless omni-shopping experiences. The new Walmart store has convenience, experience, and membership in mind, and it’s no surprise. The transformation came in 2 phases: the first one was completed in September 2020, and the second one has been in testing since February 2022. While the first phase was focusing on in-store navigation and efficiency, the second one is about giving stores a new look and feel, as well as offering customers a digitally enabled shopping experience. In parallel, the Walmart+ membership program was launched and gained traction.

On the one hand, by developing new visual merchandising features, Walmart is encroaching on Target’s turf, both taking cues from department stores that are usually masters in the visual merchandising area. On the other hand, by heavily boosting their membership program, they are chasing after Amazon.

Focusing on navigation and wayfinding

Focusing on a customer-centric approach, Walmart developed new store signage with a sleek and bold aesthetic. The update goes from the exterior to the interior of the store. New very visible signage (Dairy, Pizza, Bakery…) highlights product categories and brings enhanced visibility to key products and departments throughout the store. With surfaces ranging from 6,400 to 24,200 square meters (the average surface being 16,500 square meters), it’s key for Walmart to be able to quickly guide customers to the section they are looking for. In that perspective, using airport signage navigation has proven  efficient: as a result, Walmart stores’ aisles are now marked with letter and number combinations.

The new signage goes hand in hand with the store app. It has also been updated to reflect the Walmart app and make customers accustomed to downloading and using it from the very beginning of their journey. To that end, a store directory at the store entrance invites customers to download it thanks to a QR code. The app offers end-to-end digital navigation and guides customers throughout the store.

Stores also include self-checkout lanes with Walmart+ members dedicated ones, as well as contactless payment solutions, including Walmart Pay. Select locations also offer a Scan & Go service to help customers manage their checkout directly. Shopping cart’s comfort has also been improved to include phone and drink holders.

Overall, by helping customers navigate more easily and quickly throughout the store, Walmart wants to offer a more efficient and convenient shopping trip, hoping this will help retain customers in stores, and possibly to larger purchases. The first phase of the new concept was tested, got very positive shopper feedback and has now been rolled out in more than 1,000 renovated stores.

Competing with Target using visual merchandising tricks

Walmart launched phase 2 in early 2022. The new store experience developed there is called ‘Time Well Spent’ as the retailer ambitions to become a destination where customers want to spend time, and not just deal with shopping fatigue. As a result, the focus is on experience, product try, touch and feel, which are not necessarily the usual features of a supermarket. Walmart also increases comfort by offering wider lanes and more space within its key departments, in an attempt to make shoppers feel more relaxed and have the impression they spend some quality time shopping.

Walmart is amplifying the physical design elements to inspire customers and elevate the experience thanks to lighting, space enhancements and dynamic displays. New displays are featured at the most strategic corners of some departments to attract customers in and help them touch and feel products. For instance, home sections feature a bedroom or a living room set up where shoppers can try pillows or blankets and buy them on-site or order them to be home-delivered. Also inspired by Target, electronic sections have been reorganized with long display tables, including proximity stocks. In the apparel, nursery and beauty departments, the new Walmart store makes room for brand shops and intends to develop a “store within a store experience”, still following Target’s footsteps.

Digital touchpoints are also developed. Using stores as a primary display, a larger range of products and services is available a click away thanks to QR codes and digital screens. For example, in the pet area, a customer can scan a QR code to find additional product options, learn about Walmart’s pet insurance service or have their dog food bags home delivered. Smart screens are also used for a variety of purposes. For example, a passively interactive widescreen above the men’s grooming section will automatically display reviews of a product when a shopper takes it off the shelf.

Competing with Amazon thanks to a strong membership program

To compete with Amazon Prime, Walmart launched its membership program, Walmart+, in October 2020. Five months later, it was already considered a success thanks to its estimated 7.4 to 8.2 million users representing 30% of US online grocery transactions whereas Amazon was only accounting for 27%.

Early June, and in an attempt to coincide and compete with Amazon’s Prime Day, the first Walmart+ Weekend three-day sale event was held exclusively for Walmart+ members who received special access to sales on thousands of items. It remains to be seen whether this sale will become an annual event but the results seem quite promising: the average Walmart+ Weekend spend per order was $69.75: while it is slightly more than the regular average Walmart.com order of $64.99, it is much more than the Amazon Prime Day 2021 order of $54.17. Forty-seven percent of the Walmart+ Weekend orders were placed for $100 or more, compared to just 27% of Amazon Prime Day orders last year.

Walmart+ Weekend was also open to customers outside of the membership program even though they would not have access to the best deals. But it has obviously been a way to attract more customers and generate more sales.

Walmart+ membership is noticeably less expensive than Amazon Prime: it costs $12.95 per month (or $98 per year) compared to Amazon Prime’s $14.99 per month (or $139 per year). Since its inception, Walmart+ has attracted urban, young and affluent online shoppers, on top of the usual customers. Like most memberships, Walmart+ gives access to special prices, product releases, early access to sales, online special deals, free shipping with no order minimum required, and free same-day grocery delivery from local stores (with a $35 order minimum). At a time when inflation is skyrocketing and consumers are reducing their discretionary expenses, Walmart+ offers interesting additional perks: members can save up to 10 cents per gallon at more than 14,000 gas stations and receive 6 free months of Spotify Premium.

So, will the transformation be enough for Walmart to keep its position? Directly competing with Target and Amazon, Walmart is taking from both to become a perfect combination of experience, convenience, and membership. They are testing new ways to elevate their stores and design them as destinations rather than only competing on the price point. They are also in a ‘test and learn’ process and are making changes based on the customers’ feedback.

While such changes are important in the customer’s eyes, analysts are showing scepticism as consumers still prefer Amazon, Target or Home Depot, and as sales growth slowed down during the first quarter of 2022 first. The question is whether Walmart’s new store features and, crucially, distribution capacities will be enough to compete with Amazon growing its capacities very fast to shrink the delivery delays so much that customers won’t have a reason to go to stores. As an answer, Walmart will build 4 new fulfilment centres in the next 3 years including automation, machine learning and robotics, to offer next-day or two-day delivery to 75% of the US population. So far, one of Walmart’s strengths is also that half their sales are coming from groceries which are still mostly purchased in stores, whereas Amazon’s Wholefood and Fresh supermarket results have been disappointing so far. Also, having stores within 10 miles of 90% of Americans is an unparalleled opportunity to thrive in the omnichannel business, and - maybe - defeat Amazon?

Credits: IADS (Christine Montard)