This Omni Talk Retail Fast Five segment, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, Quorso, and Veloq, breaks down Walmart’s push into trendier, more upscale home goods as it looks to attract higher-income shoppers and take share from Amazon.
Chris Walton and Anne Mezzenga discuss why home is ultimately a price-and-search-driven category, how Walmart’s scale, returns, and Walmart+ advantages change the game, and why selling high-end items may be far less risky than it appears.
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Transcripts
Speaker A:
Walmart is leaning into trendier, more upscale home goods as part of its push to attract more high income shoppers and better compete with Amazon.
Speaker A:
, a $:
Speaker A:
Apparently, apparently that's all it takes to move up the value chain is an ochre velvet swivel chair.
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% share in:
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Walmart's share fell to 7%, down from 9.3% in the same period.
Speaker A:
Walmart has been revamping its home goods since identifying it as an area for improvement nearly a decade ago, bringing in brands like Yankee Candle, Nespresso and Drew Barrymore's Beautiful line.
Speaker A:
The retailer's internal research shows shoppers equate stylish designs with better quality.
Speaker A:
And the strategy aims to, quote, democratize style, end quote, while improving margins beyond its tight margin grocery business.
Speaker A:
Chris, do you think consumers will shop Walmart for high end espresso machines, ochre swivel chairs and lavender crock pots?
Speaker B:
Yeah, believe it or not, I actually do.
Speaker B:
And actually when you read the statistics like that, it actually makes me go, Jesus, I, I'd love a chance to run the home furnishings business at Walmart like I did for Target.
Speaker B:
Like there's a lot, lot happening here.
Speaker B:
So you know, we said at the beginning that, you know, everything always comes down to money.
Speaker B:
Well, the sibling of that is everything always comes down to price.
Speaker B:
And E Commerce and home is a search game.
Speaker B:
I know that firsthand.
Speaker B:
The best price always wins out.
Speaker B:
And I can remember fighting perceptions like this.
Speaker B:
Like the article describes when I was running home furnishings for Target.com and people thought I was nuts for selling $5,000 sofas via Dropship.
Speaker B:
But then you know what?
Speaker B:
We sold one and then we sold more and more and more and more and by the time, at that time we were winning because, because of the Target brand and what it represented to people and the extra 5% off you got from red card savings.
Speaker B:
almart plus but now also with:
Speaker B:
So yes, yes, 100%, this is all just low hanging fruit in my mind for Walmart and they're smart to go after it, particularly when you cite those share numbers that you just did.
Speaker A:
Yeah, I mean I think it goes back to what we were talking about at the beginning of the show.
Speaker A:
Chris, with ChatGPT.
Speaker A:
People are using these search engines to get information about products to figure out what's going to fit in their house.
Speaker A:
I mean, do customers care at the end of the day, whatever ChatGPT or Gemini spit out about the espresso machine, do they care where they buy it from?
Speaker A:
No, it's coming down to where can I get this the quickest or most conveniently on my terms for the best price possible.
Speaker A:
And might they be surprised that Walmart is that location?
Speaker A:
Possibly.
Speaker A:
But then you have to look at all the other things that come into play from buying something like this from Walmart too.
Speaker A:
You, you have 4,000 locations across the lift.
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Something goes wrong, you can return that simply.
Speaker A:
What does that look like for Amazon or Wayfair?
Speaker A:
No, not good, Not a good experience.
Speaker A:
I'm waiting in line to do that.
Speaker A:
They there's a lot more to this that I think Walmart stands to gain for little to no risk for them to start to carry out.
Speaker A:
And I think we're already starting to see customers getting more familiar with this with some of the partnerships that they did last year, they announced last year with Rebag and stuff, Stockax and other who Knew categories.
Speaker A:
I mean their whole who Knew campaign was you can get a sauna from Walmart, who Knew.
Speaker A:
But it works.
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And if it doesn't work, you have a lot of convenient options to remedy that.
Speaker A:
And so I think this is a brilliant move.
Speaker A:
And if I were Walmart, I'd continue to push this, especially as they have more and more high income consumers who are interested in the products that they have to have and especially in home and fashion categories.
Speaker A:
So I think it's a really smart move.
Speaker B:
Oh my God, you just gave me like Vietnam like flashbacks and to my days at Target when I was like saying the exact same thing that you just said about returns and everything to the leadership in the board was being like, this is why we need to do this guys, because it makes sense strategically.
Speaker B:
And now here we are talking about it again.
Speaker B:
And you're right, like, I mean you've got, the studies have already shown that people are using Walmart and Walmart plus to buy their groceries.
Speaker B:
Walmart's winning with the 100 plus hundred thousand plus household income crowd.
Speaker B:
So like, yeah, if they can find a cheaper option here, they're gonna do it like this.
