What Walmart’s Bettergoods means for the price war

Rising costs presented unprecedented challenges for grocers as dollar stores entered the grocery space. A recent analysis of customer losses by InMarket found that for a national mass retailer, grocery is the category where the most customers are lost to dollar stores.

The “price war” forced both sides to adjust to attract and retain customers of all income levels. Dollar store chains introduced more expensive items, and leading retailers such as Walmart and Target introduced lower-priced product lines.

Today, value alone is no longer enough. Walmart’s recent developments in its quality-focused value assortment and omnichannel offerings show the direction we’re headed. While traditional grocers can’t undercut dollar store prices, they can amplify the benefits dollar stores are notoriously short of – quality and convenience, including expanded services and meal options.

This is how you achieve the right balance between value, quality and comfort and emerge as the market leader in the Value Wars:

Emphasize what matters most to your customers

Walmart’s Bettergoods taps into consumers’ perception of value, which often confuses price and quality. With the goal of making high-quality groceries affordable, most products will be priced under $5, matching dollar store prices.

Producing higher-quality products at a lower cost appeals to key demographics, such as high-income shoppers and trend-conscious Gen Z, who may want to save on grocery shopping but still crave better quality. This is especially true in product categories like dairy, canned goods and condiments, where we see many shoppers switching to lower-cost products.

In addition to aligning with recent moves by competitors like Target, the company is also reflecting behavioral changes in the restaurant industry. A recent survey found that 68% of restaurant-goers are no longer eating out due to cost, preferring to cook at home. bettergoods’ “Restaurant Style” and “Made from a Family Recipe” products could attract interest from shoppers looking for specialty foods at a fraction of restaurant prices. Other grocers are also adapting by dedicating more space to meal options and promoting food services to capitalize on the trend.

Walmart’s Bettergoods strategy emphasizes the importance of identifying customers’ core motivations with detailed analytics both inside and outside the four walls of your store. A 360-degree view of performance across the competitive landscape and adjacent categories improves customer-centric strategies and enables retailers to more effectively reach their customers and drive awareness, sales and loyalty.

Encourage incremental and repeat purchases through convenience

One of the biggest challenges for grocers is encouraging both multi-buys and repeat purchases as consumer shopping patterns are fragmented. An InMarket study found that loyal Dollar Tree customers also visited Walmart, Target, Sam’s Club and Aldi in the same month.

A good solution is to rely on convenience, like Walmart’s extended delivery times. With Bettergoods and expanded delivery options, Walmart can create a successful promotion that combines value, quality and convenience to drive the purchase decision throughout the customer journey. For example, in a cross-channel campaign with complementary mobile, social and CTV ads, Walmart could create an interactive recipe experience highlighting a 10-minute meal using Bettergoods products, with a link or QR code call-to-action that allows shoppers to quickly add the items to their cart and receive same-day delivery.

There are countless ways to increase cart size and encourage repeat visits by highlighting benefits shoppers can’t get elsewhere.

Use insights to drive success

With increasing competition, every advertising dollar becomes more valuable. Marketers must rethink their measurement methods to avoid being left behind.

Real-time technologies, including measurement solutions, can help. Improving measurement infrastructure can be done in three strategic ways: 1. Take a holistic approach to KPIs that combines brand, visit and revenue lift. 2. Keep an eye on performance in real time to understand changes in consumer behavior as they occur, be it visits or sales KPIs. 3. Optimize in-flight campaigns to get the most out of ad spend.

Looking at visitation and purchase behavior can be tremendously helpful in understanding who you may be losing customers to and for which specific goods and services. Agility and adapting ongoing operations based on existing campaigns is also critical to optimizing every dollar spent.

This holistic approach to real-time measurement allows you to understand and respond to customer needs in real time while building a robust first-party data set to guide future marketing efforts.

The value wars aren’t going away – the environment and changing consumer behavior are just making it harder to respond. Fortunately, technology and insights are evolving and increasingly being delivered in real time, with AI evaluating critical data components like visits and purchases to improve every interaction.

It’s more important than ever for grocers to predict the future. By leveraging data, focusing on the customer and increasing differentiation, you will not only succeed, but you will set trends for others to follow.

Michael Della Penna is In the marketChief Strategy Officer with over 30 years of experience in digital marketing. Previously, Della Penna was Chief Revenue and Growth Officer at Cuebiq, where he built and led the sales, customer success and delivery partnerships teams. He also served as Group VP, Oracle Marketing Cloud and SVP, Emerging Channels at Responsys. In addition, he founded Conversa Marketing, a social CRM company that was acquired by StrongView. Della Penna’s other key executive roles include CMO at Epsilon and CMO at Bigfoot Interactive. He has been named one of B-to-B Magazine’s “100 Most Influential People in B2B and Interactive Marketing” five times.