Walmart gears up for baby-related sales in effort to win Millennial dollars

In recent months Walmart Stores has made a big effort toward introducing expanded baby departments in select supercenter and neighborhood market stores. After listening to parents across the country, the retailer announced in late July it had expanded its assortment of baby products and services, to include device prevent children from being left in vehicles.

“Over the past year or so we have added 20 brands to our baby department after listening to what young parents want,” Diana Marshall, vice president of Walmart’s baby division told The City Wire on Wednesday (Sept. 30).

Marshall, who is a Millennial parent, said she and some of her buyers who are also young parents have taken their own concerns and ideas to suppliers in recent months in hopes of finding solutions and high-quality items like organic baby food and economical, yet durable diapers.

The retailer also said it’s committed to lead the baby industry in the areas of product safety, national brands at low prices, and baby-clock shopping – a term Wal-Mart has coined to describe the moment parents find it most convenient to shop, whether it’s in a store after that well-needed nap or in the still of the night on their mobile device.

A Goldman Sachs study recently found that American consumers spend $1 trillion on their children every year. The report also notes that Millennials, born between 1980 and 2000, are spending at a higher rate on children than previous generations.

Analysts support Wal-Mart’s effort to beef up its baby offerings.

“With Target's focus on baby-related products, it's wise for Wal-Mart to step up their efforts here. Wal-Mart is already a favorite with millennials due to lower prices. If Wal-Mart continues to add products that appeal to Millennials such as natural foods, craft beers, baby-products, etc. they'll pick up their fair share of this business,” said Jason Long, CEO of Shift Marketing Group in St. Louis.

Wal-Mart’s recent brand expansion with the likes of Britax strollers, Baby Bjorn, Bananafish and Urbinii travel systems are an attempt by the low-cost retailer to appeal to brand-conscious shoppers seeking higher end products according to some retail experts.

Chris Byne, director for TTPM, a website that critiques baby products, said the added brands show that Wal-Mart "is going for a more sophisticated shopper. Wal-Mart is vying to get a piece of that business.”

Marshall said Walmart is still committed to low costs but quality is also at the top of the requirement that buyers are seeking. Looking for the best quality diapers and training pants, Marshall said she took home every brand of diapers Walmart carries and tried them with her own child. She evaluated the products for quality and then took her findings directly to the suppliers.

“It helps to be so close to the category to be able to improve our assortment and customer experience,” Marshall said.

She said Wal-Mart just launched a new version of its private-label Parent’s Choice training pants (pull up diapers).

“We worked with Dreamworks on this product and these pull-ups have the Madagascar characters on them,” Marshall said.

She said one of the baby buyers wanted to know why car-seats did not have alarms to notify the parents the child is in the seat when the ignition is turned off. 

“We know babies die each year from vehicular heat stroke when they are accidentally left behind in the car. It’s a terrible tragedy that we wanted to try an help prevent,” Marshall said.

Wal-Mart took that issue to Evenflo, a longtime Wal-Mart baby supplier and the result is Evenflo’s Advanced SensorSafe Embrace infant car. The product uses a wireless receiver that plugs into a car’s On Board Diagnostic (OBD) port and syncs with the chest clip that goes around the baby. If the car is turned off and the chest clip is still buckled, a series of tones will play to alert the driver. The Evenflo SensorSafe car seat is the only alert system crash tested by the manufacturer and its sold exclusively at Wal-Mart.

BABY-CLOCK SHOPPING
Marshall said Wal-Mart is also focused on delivering the shopping experience that Millennial parents want which includes removing the barriers between digital and physical shopping.

She said the improved baby registry is aimed at providing these young parents more flexibility with a new mobile app that allows them to created and manage their own baby registry or shop for a friend’s newborn. Items can be added by selecting products on Walmart.com or scanning a products barcode in a store. Registries will be updated automatically when friends and family scan their receipts with the Wal-Mart mobile app after checkout.

Signs of the new flexible baby registry are displayed in the newly expanded baby department at Walmart Supercenter at Pleasant Grove Road in Rogers. Marshall said the store and the new neighborhood market location in Rogers have expanded baby departments, something the retailer is working to bring to more of its U.S. stores.

“Driving awareness and usage for its baby registry is the first step since doing so will drive multiple purchases and potentially creates long-term relationships with desirable customers. Walmart has done a great job of integrating registries into its app, a key step for Millennials, but it could do a better job of making its registry more prominent in stores,” said Carol Spieckerman, CEO of Spieckerman Retail in Bentonville.

One concern noted by Spieckerman is the location of the baby department.

“The baby section is often buried at the back of Walmart stores, for example but the registry could be pulled to the front, particularly as Walmart integrates more technology into its front-of-store proposition,” she said.

Millennials have also been reportedly fond of loyalty programs, something Walmart has avoided in the past. Even though Wal-Mart is not likely to introduce loyalty programs, Spieckerman said forging digital relationships with Millennials is perhaps better. Walmart is doing that with their Savings Catcher app that also facilitates baby and wedding registry services, price checks in-store as well as pharmacy refills.

A major challenge for Walmart among Millennials is that this generation has also become Amazon Prime members loyal to the online retailer and fans of subscription-based buying propositions like Dollar-Shave Club and Diapers.com.

“In terms of outdoing Amazon Prime, Walmart will have to continue to compete aggressively on price and assortment until wide adoption of its shipping program takes hold. Unlike Amazon, Walmart can also flex its site-to-store advantage,” Spieckerman said.