Recently, Walmart announced that they were launching their own mobile payment solution – Walmart Pay. It will allow its shoppers to pay with any major credit card, debit card or Walmart gift card through its existing smartphone app at the cash register.

This news has created a lot of discussion online around the topic of future mobile payments, and the potential success of systems like Apple pay, current-C, and others.

However the truth is, Walmart pay is not about mobile payments. It’s about data capture.

Or as some people might call it, loyalty.

Yes, Walmart has covertly launched a loyalty program.

One of Walmart’s largest weaknesses to date, relative to their competitors, has been their inability to understand what their shoppers purchase in their stores at an individual level. Because of their EDLP position, their strategy has prevented them from launching a loyalty program that would offer even lower prices to some, but that would in turn allow them to capture and understand this type of individual data.

Last October, Walmart tried to make headway on this weakness by remodeling their homepage to be personalized at the individual level. They were able to easily achieve this for their online shopping audience, for whom they have an online purchase history. What was missing was the ability to personalize their web and mobile experience for their in-store shoppers, for whom they are unable to track purchases.

So for many years, their competitors have had this secret weapon over them, which has enabled them to track shopper purchases both in-store and online, and in turn deliver personalized customer experiences across the shopping journey, creating stronger shopper relationships and loyalty.

This will now all change.

Now that Walmart is enabling Mobile payments, they can track what each shopper purchases in-store at an individual level, and understand the profile of each shopper making the in-store purchase. They can then use this information to notify their shoppers when rollbacks occur on items that they have previously purchased, driving them back into the store and increasing shopper loyalty. They can also make recommendations on other products that shoppers are likely to enjoy based on similar shoppers.

In essence, you should expect Walmart to apply the same personalization and recommendation techniques that Amazon and Netflix use, thereby providing a 1-to-1 personalized shopping experience. As this succeeds, we can expect to see incentives that will drive shoppers to use Walmart’s mobile payment system even more to increase the audience to which they can provide this enriched shopper experience.

In effect, Walmart has launched a loyalty program without having to deal with the economics of the loyalty program.

Digital is rapidly changing the retail landscape, and this is a perfect example of how retailers have the opportunity to use digital to augment traditional models for shopper engagement and loyalty in order to come out on top.

The modern shopper expects 1-to-1 personalization, and now that Walmart is setting itself up to deliver on those expectations, it is critical to invest in competitive solutions that will deliver the same and retain your shopper’s loyalty.

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