Walmart evolves: From discount store to high-end retail power

Walmart, the most well-known synonym for affordable shopping, is now surprising with a strategic change of course to also appeal to discerning customer groups. As the largest company in the USA by revenue, Walmart remains true to its discount roots but is opening up to a broader clientele. This could lead to significant growth in the coming years. Currently, the retail landscape is changing as inflation cools and interest rates fall, which does not affect all retailers equally. Walmart is on the winning side, as the company posted impressive results in the third quarter of fiscal year 2025, which ended on September 30. Revenue increased by 5.5% year-on-year, and operating income rose by 8.2%. Particularly noteworthy is the e-commerce sector, which showed fantastic growth. In the third quarter, e-commerce sales rose by 27% year-on-year, with the U.S. recording growth of 22%. These successes are due to increased deliveries and in-store pickups, advertising revenue, and the marketplace initiative. In the third quarter, most of the market share gains came from households with an income of over $100,000 annually—a target group not typical for Walmart. Although Walmart is not immediately perceived as a leading company in the field of artificial intelligence, the company nevertheless uses extensive data and machine learning models to better understand and serve its customers. This allows Walmart to appeal to a wealthier audience, especially through the digitization of the checkout area in Sam's Club stores. The checkout process is now only possible digitally, including the scan-and-go technology. In China, half of the sales are already processed digitally; 350 distribution points ensure fast delivery times of one hour. CEO Doug McMillon commented: "We are learning and applying generative AI, AI, and machine learning to solve the practical opportunities right in front of us." Although Walmart entered the e-commerce business somewhat later, it is now integrating features that particularly appeal to high-income customers. This includes a broader product range that is more easily accessible online, as well as improved e-commerce functionality, including the coveted 1-hour delivery option, for which wealthy customers are willing to pay a premium.