Wal-Mart Stores, Inc. (NYSE:WMT) is hitting it big with millennial consumers. Despite millennial customers lambasting those who shop at mega stores like Wal-Mart, internal data suggest the hip 18-to-34 generation is buying a lot of their stuff at the global retail giant.
Wal-Mart Stores, Inc. is the Shopping Destination for Millennials
It’s been said for a few years now that consumers’ tastes are shifting towards brands that are more local, better for the environment, healthier for you and socially conscious. Since millennials are the dominant consumer, some experts have opined that the days of Wal-Mart and McDonald’s Corporation (NYSE:MCD) are numbered. Is this true? The data say no.
As Wal-Mart begins to hit the reset button, the multi-national corporation is winning over the millennial demographic. Wal-Mart conceded that one of its biggest challenges was to win over the cynical but cash-strapped millennial who is beginning to start his career, get married and have kids. The retailer has apparently been successful thus far in the quest to grab millennial dollars.
Speaking with Wall Street analysts during a Raymond James conference this week, the firm’s Chief Merchant Steve Bratspies revealed that two-thirds of millennials have shopped at a Wal-Mart store in the past month. Also, according to findings, millennials are more likely to shop at Wal-Mart than any other demographic today.
But wasn’t it cool to hate Wal-Mart? Yes, but that was before millennials started to become adults.
Reportedly, millennials need to find bargains on a wide range of items, like diapers and kids clothing, in order to save some extra dollars to put towards the mortgage payments or student loans. The proof is in the data: its market share jumped 4.5 percent among millennial mothers in the last two years.
The Chief Merchant says millennials are the “most value-driven generation” that he has ever seen. Millennial consumers hone in on value, and this is something that benefits Wal-Mart.
It isn’t just cheap prices that are drawing in millennials. In recent years, Wal-Mart has started to embrace the millennial culture. This means that they are beginning to offer organic food, renovate stores with nicer grocery aisles and even integrate its stores with ecommerce technology. The Wal-Mart mobile app is the third most popular app used in retail.
Wal-Mart is being effective in its turnaround strategy, and millennials are taking notice.
Millennials Say Wal-Mart Stores, Inc. is Cool
For a while it was believed that millennial consumers would only frequent places like Whole Foods Market, Inc. (NASDAQ:WFM), Chipotle Mexican Grill, Inc. (NYSE:CMG) and other places deemed cool and hip. And it was true for quite sometime, when millennials had their meals paid by their parents.
Wal-Mart’s own data aren’t the only proof suggesting millennials like these kinds of stores.
Last summer, a report by InfoScout found that millennial consumers ranked Wal-Mart above Target Corporation (NYSE:TGT), Kroger, Whole Foods and Trader Joe’s. The survey looked at grocery and mass merchant preferences, and the world’s largest retailer won out.
Even the retailer was surprised by the results.
“That kind of shocks a lot of people, including inside the company,” Walmart CMO Stephen Quinn told AdAge. “As millennials become time-crunched with relationships and kids coming along, it’s opening up a strong need for them to have a one-stop shop.”
Some argue that the reason why millennials shop at a store like Wal-Mart is because that’s where their parents did when they were children. They saw their parents save money buy purchasing baby strollers, socks and kitchen appliances at Wal-Mart.
Millennials are a sought-after consumer group. Since they’re set to inherit an unprecedented amount of wealth from their predecessors in the coming years, brands are targeting their products and services to millennials. This entails going mobile, embracing social media and trying to appeal to millennials, whether it’s being more green or taking a lot of selfies.
In the end, millennials are breaking much of the stereotypes perpetrated by the media. They may be tech-savvy, they may want to do much of their shopping on their phones and they may want to avoid ownership (hence the rise of ride-sharing services), but when budgets are tight, it doesn’t matter if the plastic bags are plastered with the Wal-Mart logo.