5 Things Walmart Shoppers Will Be Seeing More Of

Lagging retailer is focusing on new initiatives, execution

5 Things Walmart Shoppers Will Be Seeing More Of

walmart 5 Things Walmart Shoppers Will Be Seeing More OfWalmart shoppers might not realize it, but big-box behemoth Walmart (WMT) has been a notable laggard on Wall Street so far this year.

WMT management sure has noticed, though, and nodded to this reality in yesterday’s annual investment meeting.

The retail environment overall is challenging, top execs said, but WMT is not just sitting back and hoping things get better. Instead, the world’s largest retailer by revenue is focusing on execution — in terms of cost-cutting, rollbacks and more.

WMT stock investors will get the first clue as to whether such efforts are paying when third-quarter Walmart earnings come out Nov. 14. But many initiatives take time … and it’s hardly certain these changes will trickle down to the WMT bottom line or Walmart stock at all.

Still, they’re sure to be noticed by Walmart shoppers.

With that in mind, let’s take a quick look at five things Walmart shoppers will be seeing more of in the coming months.

Self-Checkout Lanes

wmt185 5 Things Walmart Shoppers Will Be Seeing More OfI’ve been to countless WMT locations where lines of Walmart shoppers are at least 10-deep, and checking out is a nightmare. But Walmart management thinks it has found a solution: continuing its self-checkout initiative.

In the presentation, WMT noted that it is focusing on “increasing flexibility of check-out process & driving productivity.” And while not all Walmart shoppers will likely use or even like self-checkout, WMT says nearly two-thirds of its U.S. stores will have the self-checkout option by the end of 2013.

Plus, the Walmart Scan & Go app — which can be downloaded on Apple (AAPL) iPhone or Samsung (SSNLF) smartphone — allows users to scan product codes, bag items and then go straight to the self-checkout lane.

That’s just one piece of a larger push to merge the company’s digital and physical presence.

‘Made in the USA’ Goods

american flag closeup 630 5 Things Walmart Shoppers Will Be Seeing More OfWalmart shoppers might have noticed this development already, but WMT has become a leader in the onshoring trend thanks to its recent “Made in America” campaign.

WMT has pledged to buy an additional $50 billion worth of U.S.-made goods over the next decade. Walmart stores in the states get around two-thirds of their goods from domestic sources, plus many of the company’s suppliers have already made similar shifts.

This development won’t just bring jobs back to the U.S., according to WMT, but could also have a concrete impact on Walmart earnings as well. A few reasons: Once-cheap wages in countries like China have been climbing, affecting the cost of goods produced there, while domestic production also lowers shipping costs.

Plus, some patriotic publicity is a nice change for WMT, considering Walmart is generally a target of criticism — not praise.

Smaller Locations

walmartshopperswmt 5 Things Walmart Shoppers Will Be Seeing More OfWalmart shoppers are also likely to see new locations pop up in the next couple years — and not all of them will be the WMT super-centers we are used to. Instead, Walmart shoppers will see more WMT locations, in smaller formats.

Walmart’s push to add more smaller stores hasn’t gotten the best publicity. Most headlines note that cities from D.C. to New York have pushed back against the retailer’s expansion.

But that’s not stopping WMT. Instead, Walmart U.S. has plans to open more smaller-format stores than supercenters, according to top exec Bill Simon. WMT is slated to debut 235 to 265 new stores in the states during the 2015 fiscal year, and more than half will be smaller locations.

WMT illustrated this in its meeting presentation by pointing to “fill in” opportunities where grocery and dollar competitors already are. By sticking smaller locations nearby, Walmart hopes to reinforce its market position and provide broad access. Plus, WMT plans to use nearby super-centers as part of the supply chain for smaller spots.

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retro tv 5 Things Walmart Shoppers Will Be Seeing More OfWalmart shoppers should also be prepared for a media blitz in coming months, based on several comments in the WMT investor meeting. In its presentation, WMT management mentioned that it will be “shouting the holiday message” via 25 billion ad impressions over TV, print, radio, search and social.

As WMT bragged, that 50% more than nearest competitor.

A good chunk of those ads will come during NFL games on Thanksgiving. While WMT isn’t an official NFL sponsor, the fact that Thanksgiving is, of course, right before Black Friday makes it the prime advertising opportunity to reach Walmart shoppers.

In fact, WMT marketing exec Stephen Quinn said, “I don’t know why we didn’t figure it out sooner,” at a conference earlier this month.

“We’re doing more with the NFL around Black Friday than we’ve ever done,” Quinn added.

Holiday Discounts

sale tags 5 Things Walmart Shoppers Will Be Seeing More Of

Of course, Walmart wouldn’t up its ad dollars if it didn’t have something worth promoting. And the marketing shtick for WMT this year should hardly be surprising: deeper discounts than ever.

According to the WMT investor presentation, Walmart shoppers should expect the “biggest Black Friday plan ever,” with management adding that WMT is “ready for a strong holiday … guaranteed.”

Rollbacks may not sound that great to investors in WMT stock, as they naturally mean lower margins and thus could mean lower Walmart earnings.

But Walmart management made it clear that while driving sales is the priority, cost-cutting is important, too. Two examples: WMT has been reducing shipping costs and increasing transportation efficiency here in the states.

And regardless, increased rollbacks should at the very least keep Walmart shoppers smiling.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/10/walmart-shoppers-wmt/.

©2014 InvestorPlace Media, LLC

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