Walmart says it’s listening to its value-seeking shoppers – and a new survey indicates that other retailers had better listen as well.
With prices on the rise and consumers feeling the pinch, the country’s largest retailer is zigging where others are zagging, by cutting more prices instead of raising them.
Over the past several months, “we had about 30% more rollbacks in stores than what we would have had a year ago,” Walmart U.S. CEO John Furner told investors yesterday. “We’ve always had a principle here that everyday low price is important.” That’s especially true now, he said, as compared to last year during the early months of the coronavirus pandemic, when many shoppers prioritized convenience over value, grabbing what they needed when they could find it, no matter the price. This year, however, as we emerge from the pandemic, “value could be more important than convenience,” Furner said.
It’s a strategy that the findings of a new survey indicate that others should consider following.
Inmar Intelligence asked shoppers what they’re seeing as they do their regular shopping for groceries and everyday household items, and found that 89% have noticed an increase in prices. With raw material and labor costs on the rise, brands and retailers are having to spend more to manufacture and transport products. “The industry has absorbed as much cost as it could manage,” one grocery industry group recently warned, saying that passing along those costs to consumers has become unavoidable.
Half of the shoppers surveyed by Inmar said they “understand these are tough times and rising prices are a reflection of challenges faced.” But that doesn’t mean they’re happy about it. 41% said brands and retailers should find a way to avoid raising prices – otherwise, “they’ll have no problem switching stores to save money,” Inmar found. More than two-thirds of shoppers said they have switched stores to buy some of the items they regularly purchase, in order to save money.
And one of those stores they could be switching to, is Walmart. Inmar’s own data shows that brands are offering – and shoppers are using – far fewer coupons than they used to. And brands and retailers that cut back on their promotions last year still haven’t returned their discounting to pre-pandemic levels. For many shoppers, deal-seeking is more of a necessity than a lucrative hobby these days, so they’re relying more on dollar stores and discounters that offer more consistent deals.
And Inmar says other retailers should take notice. “The survey findings show just how quickly a consumer will change shopping habits in the name of cost-savings,” Inmar Intelligence EVP & President of Marketing Technology Spencer Baird said in a statement. “This should be a wake-up call for retailers, who must work to provide a seamless omnichannel experience with personalized promotions and coupons, to maintain and strengthen that customer relationship.”
As for Walmart, it’s confident that it’s on the right track and giving shoppers exactly what they want. “My optimism is higher than it was at the beginning of the year,” Walmart CEO Doug McMillon told investors. “Our stores are getting stronger,” and “we also see encouraging signs that our customers want to get out and shop.”
And where they want to get out and shop, could depend on who offers the best deals – at a time when many shoppers are more determined than ever to find them.
Image source: Walmart
