The news: Walmart is struggling to reverse an exodus of shoppers to discount stores, per a Reuters report. At the same time, the retailer is taking aggressive measures to add subscribers to its Walmart+ membership, including partnering with buy now, pay later (BNPL) company Affirm and pursuing bundling deals with streamers.
Trading down: While Walmart has made a concerted effort to keep prices low, record high levels of grocery inflation have forced many shoppers to turn to discount and dollar stores for more of their needs.
Falling behind: As Walmart loses cash-strapped shoppers to cheaper retailers, it’s also struggling to capture more spending from affluent shoppers. The company has attempted to use its Walmart+ program to lure in more high-income consumers and compete with Amazon Prime, with limited success.
Desperate times, desperate measures: As a result, the company’s tactics to grow its membership base have gotten increasingly unfocused.
The big takeaway: Walmart’s profits have taken a hit thanks to shoppers trading down and spending more of their budgets on groceries. That’s caused the retailer to lean harder on its membership offering to drive revenues—but adding a streaming service won’t be the game changer Walmart hopes it’ll be.
Instead of trying to copy everything Amazon does, Walmart needs to focus on how best to provide value to its existing customers, and fully maximize its existing advantages, such as its extensive store footprint and ability to use its market share to negotiate lower prices with suppliers.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.