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Walmart’s Store No. 8 incubator has announced the launch of its second portfolio company, Spatial&. It will focus on the opportunities to create new virtual commerce (V-commerce) experiences.

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We look at the retailer’s launch of Kroger Pay and how it fits into its focus on improving the checkout experience.

Designed to reduce friction

Kroger Pay is a mobile payment solution that combines a customer’s payment and loyalty card information. This has been developed to help it deliver a faster checkout-experience and reduce friction. The retailer also continues to roll-out its self-scanning solution, Scan, Bag, Go, as part of its focus on making its large format stores more convenient to shop. This programme was extended to 400 stores last year. Mobile payments and wallets are a key focus for retailers in the US. Walmart, Target and CVS Pharmacy have launched their own solutions. Several retailers including Costco, Whole Foods Market and 7-Eleven have added Apple Pay as a payment option.

Source: Kroger

How it works

Kroger Pay provides customers with a single-use QR code that is scanned at either a traditional checkout or self-checkout. This communicates payment and loyalty card information, along with any digital coupons and personalised offers. Kroger Pay also rewards customers who use a payment option from the retailer’s personal finance business, enabling them to earn fuel points and grocery rewards with a single scan. Kroger Pay can also be linked to any major debit, credit or prepaid card.

Supports development of new profit streams

As part of this launch, the retailer is also introducing a new ‘REWARDS’ debit card. Customers using this new payment method will be able to gain bonus fuel points, discounts on private brand products and double rewards points when combined with Kroger Pay. Growing its Kroger Personal Finance business is a key element of the retailer’s Restock Kroger strategic plan, supporting its goal to generate alternative profit streams.

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Belgium-based Colruyt is trialling voice command shopping through Google Assistant with 100 customers. The retailer hopes to “see if voice technology is an efficient tool to prepare a shopping list”.

Linked to MyColruyt app and Colruyt website

Tests will be carried out using the Dutch and French version of the Google Assistant software. Customers will use their smartphones, or any other devices with Google Assistant, to create a shopping list which is then saved onto the MyColruyt app and Colruyt website. The voice command features will also help to suggest products based on the customer's previous orders.

Lists can be sent to Colruyt's Collect&Go service too

When customers want to add an item to their list, they can simply ask their device to add it. Orders can be modified afterwards through the app or website. After completing their list, customers can forward it to Colruyt's Collect&Go service or keep it on the app and carry out their shopping in-store.

Guy Elewaut, the brand's marketing director, commented, “We will analyse with our customers if voice recognition is an effective help during the preparation of races. This will enable us to know if our customers are preparing their shopping even more efficiently”.

IGD Retail Analysis subscribers can access our exclusive report, “Digital Personal Assistants”, for insight on how ecommerce, voice and apps are being used to meet shopper needs.

As Walmart launches another online-only, or digitally-native brand (DNVB), we look at how this aligns with its broader ecommerce strategy.

Home furnishings range featuring over 650 products

MoDRN is the retailer’s newest addition to its growing collection of digitally native brands. The home furnishings brand, comprising of three collections - Retro Glam, Refined Industrial and Scandinavian Minimal – features almost 650 products. The range, which incorporates high quality materials, has been developed to replicate the elevated look and feel typically associated with specialty stores.

Source: Walmart

Walmart’s first digitally-native brand

This follows on from the launch of Allswell last year, Walmart’s first digitally-native brand. Comprising of a range of mattresses and bedding, the collection is sold exclusively on The mattress-in-a-box concept competes with several online specialists which have grown at pace over recent years. The website has the look and feel of an independent brand, with no reference to its relationship with Walmart. The company was set up as a separate unit, led by president, Arlyn Davich, with a focus on ensuring a design-centric approach.

Reaching new customer groups

Walmart has gained expertise with digitally-native brands following its acquisition of Bonobos in 2017. The menswear retailer’s former CEO, Andy Dunn, was appointed at the time to lead Walmart’s operations in this area. While Bonobos has been able to optimise Walmart’s scale, its has remained independent, enabling Walmart to learn how to build and scale-up digitally native brands, the role of digital marketing and storytelling and how to reach new customer groups which would not typically be Walmart customers.

Elevating the online customer experience

The retailer has also acquired ModCloth and Eloquii to add to its online-only brands. These brands, along with in-house developed ranges such as MoDRN and Allswell are an important part of Walmart’s future. They help to create a point of difference, will elevate its focus on the customer experience across all its online properties and enable it reach to younger shoppers, especially millennials and digital natives.

Improving the economics of ecommerce

These brands are also an important element of improving the economics of ecommerce. Vertical brands typically have much higher gross margins and deliver to the bottom line as they scale up. They are also data rich as everything is undertaken in-house, enabling the offer to be continually refined and improved. Further acquisitions are likely in the future as Walmart builds-out is repertoire of brands, supporting its longer-term vision for its ecommerce business.

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