Walmart launches ‘pay with cash’ online option

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Walmart is to launch a ‘pay with cash’ option for online shoppers.

Walmart is winning back core customers through its restored EDLP initiative

The initiative is a first for the US, and a clear nod to Walmart’s core customer – lower-income Americans living paycheck to paycheck.

During the recession, the retailer neglected these customers, leading to more than two years’ worth of declining like-for-like sales. Walmart is now working hard to restore its EDLP initiative in order to win back those shoppers that defected to dollar stores and other supermarkets. Initiatives such as layaway and a new price comparison campaign, which has more than a faint whiff of Asda Price Guarantee about it, are beginning to pay off. Like-for-like sales and shopper traffic are back in positive territory.

Some 85% of transactions in Walmart stores are paid in cash or cash equivalent, and there is still a disturbing correlation between government assistance funds being paid out and essentials being purchased at Walmart.

That said, surely if shoppers in this low-income bracket do not have access to credit then it is unlikely they will have the ability or desire to buy products online. Walmart clearly disagrees, stating that 81% of “unbanked” consumers still have internet access.

But does this take the term multichannel one step too far? Shoppers select items online from Walmart.com, then within 48 hours go to the store (either Walmart or Neighborhood Market) to pay for the item, and then arrange for the items to be delivered to their home or local store. Surely, it would be more convenient to just go to the store, pay and take the product home the old-fashioned way.

Retailers in emerging economies have been embracing a similar strategy for years except cash is often paid upon delivery, particularly in markets such as India and Russia. In South Africa, consumers can purchase virtual cash vouchers from Ukash, enabling them to buy online from chains such as Shoprite and Pick n Pay.

Even in more developed markets like Japan, consumers can order online from Amazon and pay in cash at their local 7-Eleven convenience store.

Despite its complexities, Walmart’s initiative will help to raise awareness of its ongoing efforts to play catch-up in the digital world.

If a success at home, Walmart will inevitably roll this out to the many emerging markets in which it operates.