Photo: Walmart
Walmart’s customers love its low prices but still have gripes
Walmart seems to have improved its public image a lot over the past few years, but a new study indicates that consumers are still not huge fans of shopping in the retail giant’s stores.
In the 2021 American Consumer Satisfaction Index (ACSI) study, Walmart finished last in retail, drugstores, supermarkets and online retailers, according to TheStreet. It had the lowest score of any retailer in the supermarkets category and finished well below average in every category. It also dropped year-over-year in all categories besides retail, where it remained the same. The retailer’s score in each category was on par with the scores of unpopular cable and internet providers elsewhere in the survey. Walmart was significantly outperformed by both Costco and Target.
Walmart over the decades developed a reputation in some quarters as a suburban big box retailer that displaced mom-and-pop grocers and offered an impersonal, dingy, low-quality store experience along with its big draw – everyday low prices.
The chain has been actively working to escape its negative customer perception and improve its store and online experiences.
In 2017, after a spate of acquisitions of independent and direct-to-consumer brands like Modcloth and Bonobos, Walmart launched its Store No. 8 tech incubator, meant to develop higher-end, high-tech offerings not typically associated with shopping Walmart.
More recently, in 2020 Walmart launched its Walmart+ subscription service to try to boost customer experience and loyalty. Walmart+ is a membership perks program analogous to Amazon Prime. The retailer this week announced a major expansion of gas discounts for Walmart+ members.
The chain is currently engaged in remodeling stores to make the shopping experience more enjoyable even as it continues to focus on helping Americans stretch their dollars further in inflationary times.
With environmental sustainability emerging as a big concern for some shoppers, the chain launched a “Built For Better” product label last year to let customers identify products on the shelf that Walmart defines as more sustainable.
And with labor activism in the U.S. catching on at a rate not seen in decades, Walmart announced last year that it would raise wages for 425,000 employees.
- Costco and Target Have a Huge Edge Over Walmart (It’s Not Price) – TheStreet
- Will a bigger gas discount drive Walmart+’s subscriber numbers higher? – RetailWire
- Is Walmart’s Store No. 8 breaking boundaries or bonds with its core customers? – RetailWire
- Walmart gives workers a raise and weighs in on the minimum wage debate – RetailWire
- Will Built for Better put Walmart in a better light? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Why do you think customers that love Walmart’s low prices remain dissatisfied with the shopping experience? What do you see as being the most significant steps Walmart is taking or can take to improve its customer satisfaction score?
Poll
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Georganne Bender
Principal, KIZER & BENDER Speaking
Jeff Weidauer
President, SSR Retail LLC
Walmart’s stores vary. Some newer ones provide a reasonable experience. Some of the older ones, especially in remote rural locations, are pretty depressing affairs. Across the board they tend to be functional rather than aspirational. In some ways, that was always part of the deal: Walmart provides low prices and, in exchange, consumers should not expect anything too special in the shopping experience. However this dynamic is shifting as Walmart competes more heavily with online, as other value players like Aldi spruce up their stores, and as Target continues with its brand investments. Walmart needs to step up its game, especially in non-food. The one thing I will say for Walmart is that while its stores might be basic, it is an excellent operator. The pandemic period aside, it is usually well stocked, has people on the floor filling and tidying, and runs a tight ship. That’s more than can be said for a lot of retailers!
Neil- yes, I concur with the statement: “Walmart stores vary.”
I live in one of the most competitive states in regards to Walmart and, as time has passed, they are not the lowest priced store in the market. This is most evident as they close the older stores and open the new format, “more modern” stores. I will say they have been very good at keeping in-stock conditions and that is a favorable attribute I hear often from people who shop them.
I believe they are moving towards the center where retailers like Target exist (great quality, on-trend, fair price).
Walmart can’t continue to show apparel using beautiful magazine-like photos and then expect shoppers to dig through masses of H-racks to find the merchandise once they visit the store. There are plenty of ways to keep a low price perception while improving visual merchandising.
This may be the experience at newer stores, but your description is totally foreign to my experience at Walmart Supercenters in both the Midwest and Southeast. Instead of well-stocked and tidy, taking my elderly mom to Walmart for groceries is like going to a bombed out warehouse with slim pickings for core items. Many of the non-food aisles are like obstacle courses where 2 carts barely fit side-by-side under the best of circumstances, but now impossible with a floor either littered with discarded items or pallets waiting to be stocked by employees they need to hire. It was like this before COVID and has only deteriorated with supply and labor issues. My mom’s only answer to why she still shops that awful store is “because it’s the cheapest.”
Shaking a stigma is no easy feat, but Walmart is on its way. The stand it has taken on employee wages, tuition programs, promoting from within, sustainability commitments, and DEI programs are all the right things. Additionally it has made investments in brands as well as the hiring of Brandon Maxwell as creative director to address fashion perceptions. Consumers say what they want, but sometimes that doesn’t match what they vote for with their dollars. Walmart is shifting at the pace that adds value without extreme cost adds so that the consumer moves with it. It’s a big ship, but is already changing course.
Walmart is always compared to Target, but when we’re talking about the sales floor there is no comparison. Target stores are bright, displays are fun to shop, and graphics are bold. (Store associates being allowed to wear anything that resembles the color red still confounds me, especially in a company so big on branding, but that’s another article.) Target provides shoppers with an upscale ambiance with low prices. We feel good shopping there.
Walmart is like a sandwich with great bread, but what’s inside isn’t as tasty. The stores are cavernous and dark and product is housed rather than displayed. The retailer has made huge strides merchandise-wise, it’s time the stores reflect those changes.
Walmart is where you go to get things you need without overpaying. Full stop. There is no “positive shopping experience.” With many stores moving to self-checkout only, the entire trip is functional. When heading to Walmart, it’s best to leave your experiential expectations at home.
Exactly Jeff – it’s not meant to be an experience, it’s meant to be functional. Not every shopping occasion is, or should be, exciting, and Walmart fills that I-need-stuff part of the marketplace.
Merchandise is merchandise. But perception is everything, especially the first 15 seconds. I think these listed comments are extremely correct: it’s all perception and feeling. I have never seen anyone nodding their head to the music pumped into the store.
Walmart’s brand promise, from day one, has been rooted in everyday low prices. The bare bones shopping experience was almost a point of pride. That was the deal. That was the trade off — low prices for a no frills shopping experience. That was then. Today’s shopper has different expectations. Walmart has a long slog ahead to make the necessary store upgrade investments. In the meantime, I’m pretty sure the low prices will mean most customers will remain loyal.
Perceptions die hard even when faced with a different reality. Customers’ perception of Walmart was built on store interiors that were basic, low cost goods and customer service that was limited to ringing them out. While none of this may be true today, many customers still perceive Walmart that way.
I think you have to pick a lane. Do you want really low prices? Better tamp down those expectations. Considering that, Walmart does a good job and is always trying new things. Where’s the article about the dollar stores? Different rules apply?
It’s challenging to be both the low price leader, and a destination. The customers will flock to Walmart for groceries that are less expensive than the competition down the street. This is a case of “you get what you pay for.” Customers who expect the lowest price should not also expect the frills and excitement that come with shopping at Target. It is noble that Walmart wants to change the perception, but at what cost? Are they willing to have stores that are more attractive to customers, yet lose the advantage of being the low price leader?
One of the big differences between Walmart and Target is the autonomy their store directors have to influence their stores appearance and assortments. Target store managers have no say in the products on the shelves or the displays they are merchandised on. The facility management is centralized.
Target store managers are not allowed to put products in the aisles, or create ad hoc displays of seasonal products like you see at Walmart. I believe all of this contributes to the inconsistencies you see, even between Walmart stores. Target drives consistency, Walmart has put more focus on expenses and operational efficiencies. Keeping all this mind, Walmart stores also have much higher traffic in their stores. The wear and tear alone would also, at least in part, explain why Walmart stores may not be as crisp as Target.
Being the best at low price and experience is not impossible, but very difficult. Professor Barbara Kahn of Wharton Business School highlights this in her book, The Shopping Revolution. Walmart has been on a journey to improve the in-store and online experience for the last few years, and they’ve made great strides, but still have a long way to go. Though EDLP is embedded in every store, the experience is much more variable by location.
Walmart’s sole reason for being has been to deliver consistently low prices. That’s it. If they are delivering on this, and it’s noticeable compared to other retailers, then core customers shouldn’t have any reason to deliver low satisfaction scores. Because this is what they came for. It is in brand alignment and its promise has been fulfilled.
If there is dissatisfaction in Walmart about the shopping experience, then maybe the company has inferred or allowed additional brand promises to do more — bolster the shopping journey, nicer store decor, or new services, and amenities.
The irony is, in order to deliver consistently low prices and be the leader in this segment, doing other things well “also” is a recipe for consumer confusion, and greater dissatisfaction scores.
Target and Costco are sometimes mentioned as competition. But they’ve always had different brand promises, experiences, product mixes, and service because they aren’t cornered into the “consistently low prices/low price leader” approach.
Well, ‘cuz they’re ingrates. No seriously, when all you offer is low price, the natural way to compete against you is to offer low price plus something more: dollar stores offer rock bottom prices in a more intimate environment, online sellers give stuff away and bring it to your door (at least until the start-up money runs out)….
That’s the nature of competition. Walmart’s strength, of course, is the staying power that being the worlds biggest (conventional) retailer can bring to the equation.
Pricing is only one piece of the value equation. Satisfaction is all about performance minus expectations. There are retailers known for their low prices, sales and promotions, that do well at satisfying their customers from all angles. However, even with low prices, retailers and brands can fall into the trap of “you get what you pay for,” and the value to the customer and the experience it offers becomes subpar. Without considering the rest of the experience such as the store layout, ease of shopping, merchandise quality/availability/variety, and staff/service, pricing alone won’t be enough to satisfy and delight customers. Walmart will continue to do well based on convenience and price, but there are significant opportunities to differentiate and increase the awareness, consideration, and draw of customers to all the ways Walmart can serve them.