The world’s largest retailer continues to revamp and revitalize its brand in an effort to turnaround and focus the company’s investments on more sustainable, long-term goals. Some of these goals include boosting e-commerce sales, making stores more efficient, as well as appealing to a higher-income shopper. As part of its new strategy, Walmart will take on a new chief marketing officer in January. Walmart’s new CMO is a former marketing guru from Target Corporation, who spent over thirty years marketing Target’s cheap-chic image. As Walmart is looking to attract middle and upper income households, the new CMO will have a lot of decisions to make.
As part of Walmart’s effort to improve its brand image, the company recently introduced Walmart Pay, a mobile-payment system. Walmart Pay, now part of the current Walmart app, allows customers to check out with simplicity and ease, as mentioned on its website. The main advantages of having the mobile-payment system is that Walmart can circumvent credit card fees, build customer loyalty, and reap the benefits of sales. This new app has been released at a critical time, as retailers are trying to capture market share in mobile payments. However, the main difficulty that Walmart and other retailers face with mobile payment systems, is getting consumers to download and use the app.
Based on an article by Market Watch, most consumers use few apps on a daily basis. Additionally, about 50 percent of time that smartphone uses spend on apps is on their single most used app, 18 percent on their second-most used app, and 10 percent on their third-most used app. This shows that consumers spend little time on any additional apps beyond the primary three of that consumer. Furthermore, mobile payments make up a small percent of purchases in the United States. Only 18 percent of smartphone users use their phones to make a payment at least once a week.
Although it is unknown on whether Walmart’s mobile payment app will be successful, the giant retailer is hopeful. Starbucks, considered a success in the mobile payment arena, has about 20 percent of its transactions made on mobile devices, which is an increase from 9 percent in 2013. One of the key drivers in the success of the Starbucks mobile payment app was the company’s loyalty plan offered as part of its mobile app. Walmart hopes to have the same success with its new mobile payment app as it has experienced an increase of 402 percent in visitors in its shopping app from 2014 to 2015.
As Walmart is still currently in the middle of a turnaround effort, consumers can expect to continue to see differences in Walmart’s brand. The retailer is evolving to not only better-fit consumers tastes and habits but also align more with other competitive retailers. The lack of confidence that investors have had in Walmart, as told through the declining stock price, needs to be altered in order for Walmart to remain as competitive as it has been in the past.
From a marketing management perspective, here are some questions to consider:
- Research other strategies Walmart is doing to improve its brand image.
- Do you think Walmart’s new mobile payment app will be successful? Why?
- What can Walmart do to appeal to more middle and upper level consumers?