Walmart digitally engages a new type of customer

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Walmart digitally engages a new type of customer

By Dan Berthiaume - 05/29/2020

A discount giant is acting like a start-up in its pursuit of younger, urban, affluent shoppers.

Although Walmart has been making inroads into urban areas in recent years, the discounter’s core specialty remains serving the needs of middle- and working-class rural and suburban customers. However, several recent moves Walmart has made demonstrate that the retailer is taking an omnichannel focus on tech- and fashion-oriented millennial consumers, who are more likely to live in the city and have higher levels of discretionary income.

First plunge into second-hand
Walmart is jumping into the fashion resale market via an online partnership with ThredUp, a resale platform for fashion and accessories — at mass market prices. Walmart’s e-commerce site now features a dedicated ThredUp section with nearly 750,000 pre-owned items across women’s and children’s clothing, accessories, footwear and handbags.

For Walmart, partnering with ThredUp provides an opportunity to boost apparel sales that were relatively soft in a mostly otherwise impressive first quarter It also gives Walmart an entry into an online vertical – fashion resale – that chief rival Amazon currently does not participate in. And online resale is a popular platform for aspirational, fashion- and budget conscious millennials looking to upgrade their wardrobes as their salaries begin to climb.

Jet set to rise like a phoenix
Walmart recently tucked a brief announcement that it will cease operating its Jet.com e-commerce subsidiary in its first quarter earnings report. However, Walmart has received numerous benefits from Jet.com that will last long after it is grounded and scrapped. In 2018, the retailer repositioned Jet to meet the specific needs of urban areas, starting with New York City. Changes aimed at younger, more affluent urban consumers included localized imagery, messages and assortments, smarter product recommendations, re-order suggestions that predict needs to restock, and voice-activated mobile shopping lists.  

Fast, customized delivery has been offered through Parcel, the same-day, last-mile delivery company Walmart acquired in 2017. Jet also partnered with New York-based brands and small businesses to offer a more localized product assortment. 

Furthermore, Jet experimented with fully branded shopping experiences for youth-oriented brands such as Nike and Converse. Jet.com may disappear, but its spirit will live on within the broader Walmart.com e-commerce infrastructure.

The lessons of Jet black
Walmart Inc. is discontinuing Jet black, its text-based, personal-shopping service. Launched in May 2018 as the first business to go live from Walmart’s tech incubator Store No.8 (which acts like a startup within Walmart), Jet black allowed members who paid a monthly fee to order items over the phone via text message, with products delivered the same or next day for no extra charge. 

Jet black also gave members access to personal shoppers. While some everyday essentials were sourced from Walmart and Jet.com, other items and specialty products sold via Jet black were procured from local brands and specialty shops.

While Walmart is shutting down Jet black as a standalone offering, the discount giant intends to leverage technological features of Jet black, such as the ability to order via text, as well as insights gained on what types of products consumers prefer to purchase via text, across its mainstream business. 

Certainly, any and all Walmart shoppers will be able to obtain text-based customized service and access to “off the menu” specialty goods once the retailer integrates Jet black into Walmart.com. But it is reasonable to assume a majority of the customers taking advantage will skew younger, wealthier, and more urban. 
 

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