Walmart: what does the future hold for Black Friday?

Walmart* is a staples business with defensive characteristics that stands out because of its strong growth exposure. In uncertain times it has increased market share by targeting value-oriented customers from both lower and higher income brackets, providing them with a curated and value-for-money selection of goods, a reliable delivery model, omnichannel solutions, consumer service and convenience.

Performance has followed. Sales have surprised to the upside for the past 19 reporting quarters.[1] The mass retailer is still on track to retain its pole position with estimated sales of $680 billion for 2025 (for comparison, Amazon’s* expectation is $707 billion and Costco’s* is $273 billion). Earnings have surprised to the upside for the last 10 quarters, and looking forward, the 3-5Y estimated earnings per share growth is still higher than peers at over 9%. 

What is Walmart planning for Black Friday 2024? 

Walmart has planned three events between November and December to offer savings, with priority for paid Walmart+ members, in store and online.[2]

Why push Black Friday offers? To increase customer loyalty and invite customers to become members. A key strategy is to launch exclusive deals and VIP access to reward loyal customers, such as Walmart+ members.

With price-match guarantees both online and instore, Walmart has created an idea of scarcity and urgency, encouraging customers to make the most of items that are sold at discounted prices.

Social media and online presence are other strategies to attract customers. The complete set of offers is available on the website or on the app.

How is Walmart preparing for the Black Fridays of the future? 

It is not all about offers and discounts and early access to members. Last year, Walmart added some new features, such as the possibility of creating wish lists. This year, Walmart is adding even more features by leveraging AI and machine learning for personalised deals, which make the shopping experience more customer-centric. These include:

• Gen-AI powered shopping assistant. Delivers personalised and convenient experiences so that customers can discover, evaluate and decide on the best product for their unique needs. Just like a real-life shopping assistant, it will respond to customers in natural, free-flowing conversations, thereby enhancing their shopping experience
• Gen-AI powered search tool to come up with more relevant results
• New AI feature for the website to be more tailored and predict the type of holiday-related content that customers want to see during deal events and throughout the entire season
• AI-powered customer support assistant that deals with order management, including returns

Exclusive Black Friday offers and member incentives are efforts made to consolidate Walmart’s brand value, which is currently ranked among Brand Finance’s Global 500 top 10 brands. What’s more, Walmart’s multi-pronged deployment of the latest AI technology stands testament to the intense competition in the global retail space – and the incumbent leader’s determination to stay one step ahead of its rivals.

*For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.

 
[1] Source: Bloomberg as at 31 October 2024. Following figures in this paragraph are from the same source.
[2] Source: https://corporate.walmart.com/news/2024/10/28/walmart-black-friday-deals-events-dial-up-the-thrill-of-the-deal