Walmart Credits In-Person Retail for Its Growth, and It’s Not Alone

Walmart’s Q3 earnings call revealed something interesting: Walmart places much of its recent revenue growth and success on in-person shopping.

“In-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that,” the company wrote about its U.S. locations.

The growth of in-store shopping in an era of e-commerce accessibility seems impractical — but at a human level, it makes sense. What draws people in, and why are some companies (like Walmart and Amazon physical locations) doing so much better than others (like Bed Bath & Beyond) at upleveling the in-person shopping experience?

Much of it has to do with holistic customer intelligence: listening to customers and staying ahead of their expectations for a shopping trip that’s pleasant, and maybe even exciting, every time.

In-person retail holds its place in omnichannel

Walmart admits it’s winning in part due to its in-person retail, and it’s not alone. Though not as omnipresent, the upscale department store Von Maur is growing beyond its 40 locations, and it credits taking care of its customers. “Take care of them, and your business will flourish,” Melody Wright, Von Maur’s chief operating officer, said.

Macy’s is also growing, though not in the way one might expect. With malls no longer the epicenter they once were, the department store chain is replacing many of its locations with smaller-format stores in strip malls for a more accessible, albeit more condensed, shopping experience.

Unlike Bed Bath & Beyond, which closed its stores and went all in on e-commerce, Macy’s maintains that in-person bears strength. “Our small-format stores are efficient to operate, provide the customer with a shopping alternative within our omnichannel ecosystem and present a unique opportunity to target high-traffic shopping centers,” said Adrian Mitchell, chief operating officer and chief financial officer for Macy’s, Inc.

Dick’s Sporting Goods is turning certain stores into a totally unique Dick’s House of Sport, setting it apart from other sporting goods retailers by adding experiential elements in every corner.

Some of the benefits of in-person are obvious:

• The ability to see, feel, and experience products without needing to click anything.
• Shopping’s social side (even when you’re shopping alone, a store’s friendly atmosphere can light a spark in you).
• Discovering new products, which digital hasn’t quite nailed in the way storefronts are so darn good at.

Others are less obvious, like immediate gratification (because even one-day shipping doesn’t beat coming home with something new), ability to try on hard-to-size products (because America’s clothing size system is anything but straightforward), and the chance to take advantage of traffic from neighboring stores (there’s a reason Tanger Outlets is so successful).

Customer intelligence: The secret ingredient to a stellar shopping experience

Earlier this year, Ernst & Young published a report on fortifying omnichannel retail. Customer insights, they said, are a big element, requiring companies to “aggregate and analyze customer data across all touchpoints using AI and modern technology to enhance personalization and loyalty.” Today, those touchpoints are in the millions and billions for multi-location brands–and taking place on hundreds of channels and platforms, from surveys to social media, reviews and beyond. To fully achieve 360-degree customer intelligence at such a scale, the use of AI is paramount.

For example, Walmart equips its associates with artificial intelligence agents and uses generative AI to gain insights on customer wants and needs. “There’s a great opportunity for us to be more anticipatory, and to be more relevant to [customers] and communicate in a way that shows that we know who they are, in a healthy way, while protecting privacy,” Walmart CEO Doug McMillon said last year. Loyal Walmart customers are also empowered to improve the shopping experience by providing customer feedback via the Customer Spark app.

Another major retailer, Target, relies on the social media “feedback loop,” which Mick Guzman, director of category insights at Target says “is a great way to both amplify the customers that love your product and to address customers that didn’t have the best experience.” This can also keep you on the cutting edge of trends and help you find your place amid the competition by one-upping promotions.

 Social media can help you understand how customers perceive the brand on the most nuanced levels. Consider Trader Joe’s, which is notorious for friendly customer service. A few years back, a Reddit user posted a thread under the Trader Joe’s subreddit that says, “Why is everyone who works at Trader Joe’s so happy? And friendly? Seriously curious. Esp compared to Whole Foods.” This type of feedback, which even compares them to a competitor, doesn’t come out of thin air. It comes from a well-crafted operations and employee engagement strategy based on customer intelligence.

A store so good there’s no substitute to being there

For some, a trip to Target is practically a religious experience, which may be part of the reason why it’s building hundreds of new stores and enhancing existing ones.

 For customers, in-person retail maintains its status as a necessary pleasure, but not all retailers are winning. Some are falling behind, giving up the race before it’s even finished. The differentiator? Those who are listening to — and taking action on — customer insights, and using AI to do so at scale, are ahead of the starting gun.