Fact: Millennials shop Walmart. Well, lots of people shop Walmart; the big discounter didn’t grow to be one of the world’s largest retailers without any shoppers. While this fact isn’t exactly headline news, it did recently come as a “shock” to Walmart executives that the youngest generation of adult consumers perused their aisles and “like Walmart the best” over competitors, thereby implying that Millennials “love” shopping Walmart.
Whoa. Like? Love? Let’s not get ahead of ourselves. Recent analysis of 25 merchandise categories tracked by Prosper Insights reveals unique insights on why Millennial shoppers are headed to Walmart as well as how this burgeoning group of shoppers really feels about the big discounter – pointing to some weaknesses that Walmart’s competitors could turn into opportunities. For benchmarking purposes, Millennials who shop rival
Millennials shop Walmart because Walmart is everywhere. While Walmart lost some of its grip on shoppers since the recession (as well as to Amazon.com), the big discounter retains a huge footprint in the retail world: for every Target store in the U.S., there are about two and a half Walmart locations. With location a primary factor for Millennials (born between 1983 and 1997) to shop a particular retailer for a variety of merchandise categories, Walmart is an easy choice for these shoppers as well as the population at large. As such, Walmart is the retailer Millennials shop most often for 20 of the 25 merchandise categories examined for this analysis.
What’s interesting are Walmart’s and Target’s Millennial customer shares compared to the overall average for U.S. adults. While Walmart is young shoppers’ top destination for most merchandise categories, Millennials’ propensity to shop Target (compared to the overall average) outpaces their tendency to shop Walmart (again, compared to average) for 24 of 25 categories. To level the playing field and get a better look at Walmart’s so-called hold on the youngest generation, Millennials’ customer share percentages for Walmart and Target were rebalanced based on current U.S. store counts. The result? While young shoppers are clearly driven to Walmart for groceries, the big discounter lags its competitor in several key merchandise categories, including apparel, footwear, health/beauty, and toys, again highlighting Walmart’s cross-category shopping issues.
But do Millennials love Walmart? Alas, while Walmart is a top shopping destination for the youngest generation, their affinity for the big discounter is lacking. In other words, they don’t necessarily shop Walmart because they want to; this cash-strapped, financially conservative group does so because they have to. For a better understanding of how Millennials feel about their Walmart shopping experiences, the Net Promoter® Score metric of customer loyalty and satisfaction was examined.* Compared to Walmart’s overall average NPS for each of the categories analyzed for this report, Millennials’ scores for Walmart fell below the benchmark for 80% of the merchandise groupings. Further, Millennials’ Net Promoter® Scores for Target were higher than their Walmart-shopping counterparts’ ratings in 24 of 25 categories.
And among recent shoppers, Millennials rate Walmart with a general NPS of 10.0%. On the bright side, Walmart’s score is positive; however, Millennials who recently perused Target awarded the rival discounter a score three times higher (36.3%). For fun, let’s also take a look at Amazon’s NPS: 64.6%. Ouch. I guess Millennials love Amazon, like Target, and tolerate Walmart? With already tenuous ties to the big discounter, it appears that as the spending power of the Millennial generation grows, they’ll begin to move beyond Walmart as well.
Pam Goodfellow is Principal Analyst/Consumer Insights Director for Prosper Insights & Analytics™ and editor of the monthly Consumer Snapshot.
*Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld
