Walmart Targets Wealthier Shoppers
Where can I find my next work blazer, silk sleep masks, soft comforters, and duck breast?
Apparently, Walmart.
Walmart, known as the brand for budget-conscious customers, says it will upgrade store lighting and, more notably, spotlight high-end products, per Bloomberg. During the company's Q4 2023 earnings report call, Walmart CEO Doug McMillon said, “We'll remodel 928 stores and clubs globally over the next year, including 650 stores in the U.S.”
Walmart has long struggled to attract wealthier shoppers for bigger ticket items, with many customers turning to Target and other big box retailers. Bigger ticket items mean higher average order values and, in turn, more revenue and profits. The approach makes sense, but it is often tough to execute. If your brand is budget-focused and you start at a lower price point, it is hard to sell customers when you try to move up into higher price ranges, given that you are now moving into a new customer profile away from your customer base. Unless that is, your customer base is expanding. There have been some anecdotal reports that Walmart has seen some success with this strategy, but the verdict is still out.
…. and Walmart is not the only budget-focused retailer trying to attract more affluent customers.
Rick Dreiling, Dollar Tree CEO, shared during their latest earnings call in Q4 2023 that Dollar Tree’s fastest-growing demographic is those earning north of $125K a year due to an increase in the variety of products in stores.
