Walmart Acquisitions Lead To More Affluent, Educated and Younger Shoppers

By September 5, 2017Walmart
Walmart Marketplace Acquisitions

All businesses need to have one eye toward growth and expansion. This business tip is generally applied to smaller organizations. However, even major retailers need to abide by it. That includes one of the biggest stores in the United States: Walmart.

Recently, Walmart has acquired several different online retailers to expand its current offerings. Not only has Walmart expanded its inventory, but it has also attracted a completely different type of customer than the organization is used to.

How Are Walmart’s Demographics Changing?

In 2014, Business Insider collected data about people who shop at Walmart frequently. Over 4,000 individuals were surveyed, and the data showed the typical Walmart customer is a 50-year old Caucasian female who makes around $53,000 annually. This differs substantially from other retailers, such as Target. The average Target shopper tends to make around $12,000 more a year and is about five years younger. With this data in mind, it becomes easier to see why Walmart would be interested in drawing a wider range of people.

Walmart has acquired five online retailers, including:

These businesses appeal to a hipper, younger crowd. According to information collected by Digital Commerce, over two-thirds of people who shop at the above-mentioned sites have a college degree. Less than half of the people who make purchases through Walmart.com graduated from college. From this information, it is clear to see Walmart is trying to bring in additional revenue from a different kind of customer who usually shops at the store.

Why Is Walmart Acquiring So Many Businesses?

In the modern digital boom, Walmart has still managed to be successful. The physical retail shops are still doing exceptionally well, and the store has expanded to Walmart.com for online purchases. However, the store needs to remain competitive, and that involves bringing in customers who would not shop at Walmart otherwise. For example, data indicates only about one in six people who shopped at Jet.com had also shopped at Walmart.com within the previous six months. It is clear Walmart is trying to acquire companies with a vastly different consumer base so that they can bring in some of that revenue.

Additionally, these acquisitions are as much about the people involved as the businesses themselves. All businesses should actively work toward bringing the best and brightest people onto their team. For Walmart, there may be some executives who would not be interested in working at Walmart otherwise, but now, they have joined the team. For instance, after Walmart acquired Bonobos, Andy Dunn, the founder and CEO of the organization, joined Walmart’s team. His job includes collecting more digitally-native vertical brands. Walmart has also brought on Marc Lore, who is leading Walmart’s e-commerce division. By bringing on new talent that is already experienced in selling goods online, Walmart is setting itself up for success going forward in the future.

Is Walmart’s Strategy Working?

According to recent reports, Walmart’s dedication to improving its online offerings is definitely working. An article in The Denver Post reports that online sales at Walmart.com has increased by 63 percent. A good portion of the company’s revenue has certainly come from the online retailers, but it also has to do with the company’s organic additions to its own website. Some of the strategies Walmart has implemented in its website, such as free shipping on some purchases. Additionally, Walmart offers numerous items solely online. They have to be ordered through Walmart’s website, and then the products are shipped to a nearby store for pickup.

Walmart’s primary competition in e-commerce is Amazon. Walmart has been around for much longer, and it made a reputation for itself by being a one-stop shop for anything people could possibly need in a brick and mortar store. Amazon has completely flipped the industry on its head. Both companies work to attract customers, each one offering something unique. For example, in addition to selling an incredible number of items, Amazon also has a massive media library where people can watch movies and television shows on demand.

Many of the acquisitions conducted by Walmart have been done fairly recently. For instance, Walmart purchased Bonobos in June 2017. It may take some time to see if Walmart’s investments truly pay off, but it will be fascinating to see how the e-commerce realm grows in the years to come.

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