That consumers have relocated their lives online in response to the pandemic is an easily visible fact when you look at earnings reports that successful retailers are releasing. For example, Walmart recently reported that eCommerce sales increased 74 percent year on year in the first quarter, while Target saw eCommerce sales soar 141 percent during the same time period.
That shift, according to PYMNTS consumer survey data on the subject, has been largely propelled by consumers’ growing concerns about their health and safety — driving four out of 10 consumers to relocate activities like shopping, working and socializing online.
And in a recent conversation with the Wall Street Journal, Walmart’s new U.S. CEO and President John Furner said the odds are good that much of the digital transition will become permanently baked into many consumers’ standard shopping habits.
“It would be hard to say exactly how long any of these changes last, although I believe many of them will be permanent,” Furner told the paper. “We had some periods in the quarter when we saw as much as 300 percent growth rates with the [online-grocery] pickup business.”
Although new to the top U.S. job, Furner is a Walmart long-timer. He got his start with the company as an hourly store worker in 1993 and previously served as president and CEO of its Sam’s Club unit.
Former U.S. CEO and President Jeff Foran’s departure late last year marked the end of ongoing strife between the store’s physical and digital teams to more efficiently blend their operations. Furner told the Journal that amid the pandemic, that process has advanced quickly and relatively smoothly as the company responds to a rapidly shifting retail environment.
“Over the last few months, we brought the two merchandise teams together,” he said. “That’s had the biggest positive impact of anything we have done. ... Many of the differences we may have had by (distribution) channel have been put aside. If you were in the Zoom meetings with the teams across the country, they’ll be at different levels of getting along, as far as being able to approach the business as one team.”
That one-team ethic looks like it might be particularly important coming up for Walmart as it continues to battle with Amazon for its share of the consumer’s whole paycheck.
PYMNTS most recent consumer-survey data supports Furner’s view that digitization changes already visible might represent permanent changes — especially among younger and more affluent consumers. According to our latest polling, 31.1 percent of millennials have gone online to manage their retail lives during lockdown and plan to at least partially continue doing so in the future. Another 30.3 percent of Generation Xers told us the same thing, as did 30 percent of bridge millennials.
And among the total set of consumers who told us they plan to keep up with their greater digital-channel use after enforced social distancing ends, 38 percent earn over $100,00 per year.
Our survey found that the main thing keeping people logged into digital alternatives over physical channels surround concerns about their physical and economic safety.
Some 48.3 percent of consumers who plan to use digital channels to manage their post-pandemic lives as much as they do now fear they might die from COVID-19. Another 32.7 percent of consumers say they don’t plan to go back to their former lifestyles after the outbreak because they worry about economics — that their investments might lose value. Another 17.3 percent fear their partner might lose his or her job, while 11 percent worry about losing their own jobs.
As for Walmart, Furner said the chain is encouraged by “reshop rates” among online customers — especially those over 50 who are ordering online and picking up at stores.
“The customer-satisfaction scores we track on our pickup business have held up pretty well throughout the quarter,” Furner said. He added that Walmart’s physical store network might end up being the company’s secret weapon, keeping up with consumers’ desire to access the goods they’ve digitally purchase as quickly as possible. That’s what has kept Walmart performing well during the pandemic period — and it’s what will likely keep pushing Walmart forward when recovery really gets underway.
“One of the advantages Walmart has is the store footprint, and layered on the footprint is the ability for shoppers to come in, buy off the shelf, pick up or have things delivered,” Furner told the Journal. “Customers will continue to come back and return to shop either online or in-store as long as we deliver. It’s really the nature of being an omnichannel retailer that has helped Walmart in the last few months.”