Walmart goes after new market with high-end offerings

Walmart is looking to attract an upscale consumer group through personal shopping and cashierless checkout.

Walmart announced that it will test out personal shopping and cashier-free stores in an effort to appeal to a more upscale consumer demographic. The company subsidiary, Code Eight, will hire personal shoppers to give product recommendations through text messaging, and then make purchases and deliver them. All household items will be delivered within 24 hours, other items two days. 

So why the appeal to the busy urban shopper? Well for one, it's a new segment of the retail market that the big-box retailer has yet to tap. 

"To maximize revenue, Walmart is implementing these new ways to shop to become more relevant to high-end customers, a segment they have historically failed to capture," Judge Graham, CMO of Ansira, a digital, CRM and channel marketing agency, told FierceRetail.

Graham does believe that Walmart's new personal shoppers will appeal to more high-end shoppers. 

"Walmart is being smart in its new personal shopping and cashier-free store tactics," he said. "It seems very unlikely that high-end consumers would shop in Walmart superstores, which are designed to appeal to more price-sensitive, lower to middle class consumers. Walmart knows this, so they are inventing a new space just for these high-end shoppers—One with a clear focus on delivering value for a good price, while also disassociating from the standard consumer perceptions of Walmart."

However, Walmart will face the challenge of implementing the technology to go along with these new ideas. When the time comes to go to scale, it will take a lot of resources to perfect a technology capable of delivering personal and cashier-free shopping experiences to customers throughout bigger cities. According to Graham, this means in-store technology will have to undergo a major transformation.

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"There is a lot of innovation required to turn these from ideas into reality. In the past, Walmart has been a brick-and-mortar retailer and the face of traditional in-store shopping. Now, Walmart is taking its brand into an entirely new space, implementing major new technology and tactics to stay abreast of the latest retail trends," he said.

The new offerings also mean a change for the more than 1.5 million Walmart cashiers around the U.S.

Graham said it will be years before the U.S. workforce feels the effects of no cashier. And eventually it will need tech-minded employees to operate its innovations.

"Additionally, this year, Walmart cut hundreds of jobs at its headquarters and in regional offices, stating that the company is 'always looking for ways to operate more efficiently and effectively.' While these cuts left cashiers unaffected, Walmart’s decision to layoff these employees shows that the company takes great stock in maintaining the most efficient work force possible. This gives me cause to believe that Walmart would adjust it’s cashier employment, following the implementation of cashierless stores," he said. 

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But ultimately, these tactics will make Walmart more competitive against mega retailers, like Amazon, and against higher-end retailers, like Target and Whole Foods. 

"Today’s modern consumers now expects better, faster and more convenient service from the retailers they give their business too, and Walmart is adapting to meet these changing expectations," he added.