Why Walmart will be one of the future winners of retail

Date : 25 May 2020

Stewart Samuel

Program Director - Canada

The coronavirus (COVID-19) pandemic is re-shaping retail and the outlook for the sector. We highlight why Walmart will be one of the retailers that emerges stronger based on the trends currently emerging.

The return of the big-box, one-stop shopping

During the crisis, most retailers have reported a big switch-up in shopper behaviour. With the previous trend having been towards more frequent, smaller shops, during the crisis, visit frequency has fallen and basket size has increased. Shoppers have been focusing on making fewer trips in support of social-distancing measures and to limit any potential exposure.

The scale of Walmart’s stores enables it to support high demand, but also create a more comfortable shopping experience when social-distancing measures are in place. As one of the original proponents of one-stop shopping, this has aligned with Walmart’s big-box strategy, enabling shoppers to get more of their needs in one trip. The retailer’s footprint also enables it to create a more agile and flexible format, that can flex to meet extremes in demand and incorporate more permanent social-distancing measures. It has also made significant progress with contactless payment and checkout-free shopping.

Source: Walmart

Omnichannel strategy

Walmart has been able to tap into the surge in demand for online shopping. Investments is grocery ecommerce pickup and delivery have underpinned the retailer’s US growth over recent years. Ecommerce has also become an important capability across its international markets.

Its omnichannel approach has been particularly relevant during the crisis, enabling it to scale up at pace, adding more pickup slots and working with third-party delivery partners to expand availability. With online penetration expected to be at a higher level post-crisis, Walmart’s strategy to be the world’s largest omnichannel retailer appears to be a safe bet on the future. This is an area where the business also has a strong pipeline of innovation including automated fulfillment, ‘InHome’ delivery and membership programmes.

Source: Walmart

Trusted brand

Many suppliers and retailers have highlighted how shoppers have migrated towards trusted brands during the crisis. While there has been a degree of experimentation, driven by availability issues, the familiarity of well-known names, along with the trust of performance, have been important.

Although many retailers have a proud history of stepping-up in challenging times and being a trusted partner, this is ingrained into Walmart’s DNA. Its response to Hurricane Katrina in 2005, optimising its supply chain capabilities, is well-documented. However, its continued support of humanitarian crises globally, has supported the retailer with one of the key pillars of its strategy to “be the most trusted retailer.” These efforts have resonated with consumers and communities during the current pandemic and leave it well-positioned during this period of high-uncertainty.

Source: Walmart

Healthcare ambitions

Health and wellness, including pharmacy, is an integral element of Walmart’s retail strategy in the US. It’s an area where it continues to innovate and deliver value for consumers and where it is set to play a stronger role. Last year, it opened its first Walmart Health centre, offering a range of affordable services such as X-ray and EKG, counselling, dental and optical care.

Next month it is opening its third location with a new prototype located within an existing store in Springdale, Arkansas. Emerging from the pandemic, it is likely that personal health will increase in importance, including the need for a more holistic approach spanning, nutrition, mental health and education. This aligns with Walmart’s approach to optimise its scale and reach to make healthcare more affordable and accessible in the US.

Source: Walmart

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