Walmart’s newest growth market? More affluent shoppers
"I’m not embarrassed to say I bought something from Walmart anymore," says one such shopper.
Walmart investors got some good news on Thursday when the retailer reported its latest quarterly earnings. Revenue and earnings per share beat expectations, and Walmart says it’s making inroads with high-income shoppers. The company has been trying to lure them in with new, trendier products and faster delivery of online orders.
Some high-end shoppers turned to Walmart during the pandemic. Paula Rosenblum was one of them.
“The first place I got toilet paper during the great toilet paper shortage was Walmart.”
Rosenblum is also a retail analyst — she’s managing partner at RSR Research. She thinks Walmart beat expectations this quarter because it won over more people like her.
“I’m not embarrassed to say I bought something from Walmart anymore,” she said.
Rosenblum has a Walmart plus membership, which gives her free delivery on some orders. And Walmart says it’s cut its delivery time.
“The growth in e-commerce is potentially another way for Walmart to unlock this higher-income consumer,” said Blake Droesch, a senior analyst at eMarketer. He says, according to his data, about 70% of Americans already have access to Amazon Prime. So Walmart has a giant mountain to climb.
“So what they’re going to have to do is convince people who are already prime members to switch from prime to Walmart plus. It’s a little bit easier if you’re already shopping in the Walmart store,” said Droesch.
But Droesch says there aren’t that many Walmart stores in affluent areas. There is one in Sucharita Kodali’s neighborhood in Charlotte, North Carolina. She’s a retail analyst at Forrester and a Walmart shopper. She says the retailer has tailored some stores to appeal to higher-end consumers.
“You’ll see things like more organic products in the food aisles or you may see more books for instance,” she said.
Kodali says we don’t know yet how successful Walmart has been. It won’t say what percentage of its customers are high income.