4 ways Walmart is wooing millennials
Walmart is obsessed with youth. Battling Amazon for supremacy in ecommerce, the world's largest retailer is investing in new technology and taking other steps to attract younger consumers.
"Millennials have [become] a serious focus for Walmart, especially as they start to form families," said Brandon Fletcher, senior analyst at investment firm Sanford C. Bernstein.
Another reason millennials, commonly defined as those ages 22 to 37, are worth more to Walmart — financially, they're actually worth more. Despite coming into their own later than members of Gen X or baby boomers because of the 2008 financial crisis, young adults now earn more than similarly aged households have at any time in the past 50 years, according to Pew Research.
Here are four ways Walmart is wooing younger shoppers.
Digital brands
Walmart has signed a slew of partnerships in recent years with digital brands like Buzzfeed's Tasty food network, which creates viral Internet food videos. The retailer, which already sells Tasty-branded kitchenware, this month unveiled a new app feature that allows consumers to shop for Tasty recipe ingredients and then have the food delivered or ready for pick-up.
The online partnerships are helping to attract younger shoppers in coastal cities, where Walmart hasn't had as strong of a foothold, while also maintaining its core shoppers in rural America.
In 2017, it bought e-commerce apparel company Bonobos, which specializes in menswear, and Modcloth, which makes vintage-inspired women's clothing that appeals to millennial shoppers. In January, it also forged a celebrity partnership with actors Kristen Bell and Dax Shepherd's online parenting company Hello Bello, which sells plant-based baby care products for new parents.
Private labels
Millennials may have a reputation for splurging on the next $1,000 iPhone, but when it comes to consumer goods like groceries, they're much more likely to pick cheaper generics than brand-name products.
According to Sanford C. Bernstein's Fletcher, Walmart has succeeded in convincing millennial parents to opt for store-branded items. Younger shoppers increasingly favor a lower-priced shopping cart, turning to private-label grocers like Trader Joe's and Aldi for savings.
"We're seeing more private label acceptance maybe with this generation that's growing up today than with my generation. So what it's given us is an opportunity to get better in private label," Brett M. Biggs, chief financial officer at Walmart, said in a March company presentation.
Online groceries
Amazon's purchase of Whole Foods in 2017 made plain that the online retailer is a serious contender in a food fight amongst the retailers. But when it comes to online pick-up and delivery, Walmart may be racing ahead.
This fall, Walmart will roll out its "InHome Delivery" service, which will deliver groceries and even restock refrigerators for shoppers. One edge Walmart brings to the grocery battle is its 5,600 U.S. stores, which could help it reach more online grocery customers than rivals. In its last quarter, Walmart expanded grocery pickup to 2,700 locations in the U.S. It also expanded delivery to 1,100 delivery locations.
Recruiting young talent
In an effort to attract younger workers, Walmart last year introduced an education benefit allowing employees to enroll in online degree programs at three universities for $1 a day, billing it as a debt-free college education. The company expanded the online degree program this year to six universities and 14 online degree programs, such as in cybersecurity and computer science.
It also may be looking at the next generation — it extended the offer to high school students, including free SAT and ACT classes and up to seven hours of free college credit.
