What is Working for Walmart?
David Scogin spent over 33 years in senior roles at Walmart before joining Simpactful – and attributes this momentum to both Walmart’s strategies and executional excellence – as well as some critical externalities. “The 75% is impressive. This is driven by three things: Sticky inflation, grocery delivery (enabled by Walmart+ membership), and quality assortment. Here’s how they come together:”

1) Sticky Inflation (Value): Shoppers across the income spectrum have felt the inflation pinch across goods, services, utilities, housing, etc. Walmart has attracted higher-income groups with strong value, especially on staples like food and consumables.
2) Grocery Delivery and Walmart+ (convenience): In David’s opinion, this is, the #1 reason for the higher income growth. Higher-income shoppers who previously didn’t shop in Walmart stores have no problem using the app and having their CPG goods delivered to their doorstep. eCommerce grew 27% last quarter per Walmart earnings release, and it was the 8th consecutive quarter with over 20% growth. Walmart+ grew “double digits” as well, and spending continues to grow as adoption continues to grow.
3) Quality (Assortment): Walmart has always sold quality CPG brands and continues to add new brands in stores and online. In fact, the company is actively seeking a unique online assortment that is not store-shared for their fulfillment centers.

He adds, “The company is focused on owned assortment. Walmart’s private label has also gotten much better, with their Great Value brand driving opening price point value, and Better Goods driving higher quality at value.”

What’s Ahead?
Walmart is building on the three strategic pillars – Value, Convenience, and Quality assortment – with significant investments in technology that improve operations, customize the experience, and enable new ways of shopping. Walmart executives have publicly stated that 2026 is the year its AI initiatives move from experimentation to full transformation across its ecosystem. Walmart’s AI chatbot Sparky has become a cornerstone of its customer experience strategy. Company leadership reported that Sparky is now widely used in the Walmart app – and users who engage with it tend to place ~35% larger orders, showing tangible impact on customer behavior and digital sales performance. Walmart has stated it plans to expand its capabilities and offer Sparky internationally while integrating with external AI platforms like Google Gemini and OpenAI/ChatGPT so customers can discover and buy Walmart products through conversational commerce. According to leadership remarks, AI is also being integrated into core operations and shopper experiences. This includes personalized shopping experiences, predictive replenishment (e.g., repeat grocery ordering), and enhanced backend support for store associates. Walmart’s investments go beyond shopper experiences into operational AI and automation – covering areas such as distribution automation, supply chain visibility, and industrial IoT data integration. Reports show that Walmart is implementing automated fulfillment centers, AI-enabled inventory forecasting, and ambient IoT data sources feeding AI models to enhance accuracy and efficiency. This reflects a deliberate shift from pilot projects to scaled, operational AI workflows.

What should brands be doing now to win with Walmart?
We sat down with the Simpactful team of former Walmart executives and CPG commercial leaders to get their take on how Walmart’s acceleration will impact the market. Key takeaways:

 1) Winning with Walmart: Strategic Imperatives for Brands

• Align Pricing with Walmart’s Value Equation
  Winning at Walmart means engaging with its EDLP ecosystem – and that doesn’t just mean lowest price. Walmart is tracking both marketplace promotion and Omni pricing in the marketplace and expects to maintain price leadership. It is important for suppliers to adopt a holistic marketplace strategy and to leverage data-driven, flexible pricing architectures that deliver value perception at shelf, online, and in promotions. Brands that can model how their price points drive incrementality – and communicate those insights at the merchant desk – will have greater influence and share potential.

• Invest in Premium-Plus Value Innovation
  Walmart’s growth with affluent shoppers means greater buyer and shopper demand for an accessible premium assortment. CPG brands that can create compelling premium value propositions – from elevated ingredient stories to enhanced performance benefits that stand to grow faster. Think products that feel elevated without materially exceeding Walmart’s price expectations. Brands must contemplate if and how to deliver this as exclusive or early access innovation for Walmart to meet the continued push for “early and exclusive” assortment as a way to provide value and differentiation.

• Elevate Digital Content and Retail Media ROI
  Digital shelf excellence and incremental traffic drivers are table stakes. Walmart Connect continues to grow in importance as both a traffic and profit driver. Meanwhile, evolving measurement expectations mean brands must go beyond impressions to build joint plans that focus on incrementality, attribution, and impact on total business outcomes. Integrated retail media plans aligned with in-store and fulfillment priorities will outperform siloed campaigns while contributing to scorecard health with buyers.

• Prepare Now to Build Collaboration Around AI-Enabled Forecasting
  Walmart is investing in AI tools – from inventory optimization to demand analytics, which will create opportunities for closer supplier integration. Simpactful partner Neal Dellett spent several years managing the Walmart supply chain for Procter and Gamble, where he owned performance targets for fill rate, on-shelf availability, and inventory turns. He notes, “Brands must start by building the operational foundation for Agentic AI: big data hygiene, workflow optimization, and governance principles.” Logistics expert, Lindsay McShane, agrees, “Walmart is going to drive AI adoption because there is so much joint benefit potential from automating forecasting, inventory, and even logistics. However, we have seen clients make mistakes by trying to move too quickly without first making sure that fundamental processes like new item forecasting, S&OP, and new item set-up are leveraging best practices and designed to support AI.”   

2) Retailer Response: Walmart’s continued growth is not only impacting historical retail competitors like the Dollar channel and grocery but is now starting to infringe on retailers that have sourced volume from high household income shoppers. Brands need to prepare for new retailer expectations – and can show up as strong partners with big ideas and programs that help retailers compete.

• Across the Channel
  We see retailers pivoting fast to embrace AI to deliver omnichannel cohesion, data-driven pricing, and retail media integration. Walmart’s hybrid model – combining EDLP with enhanced experience and customer data – creates a high bar for competitors relying on legacy pricing and promotional models, and most will recognize this risk.

• Target and Costco
  Both Target and Costco are leaning into differentiated value. Target’s focus on curated premium tiers and lifestyle brands positions it to retain affluent customers seeking discovery and design-led experiences. Costco continues to win on treasure hunt value and membership loyalty, a powerful counterweight to Walmart’s broad-based value strategy.

• Dollar Channel
  The U.S. Dollar channel is still growing, particularly as value-seeking behavior continues across income groups – even attracting some higher-income shoppers. However, Walmart’s strategy – combining everyday low prices with omnichannel retail and increasing AI-driven personalization – intensifies competitive pressure. This has led to Dollar store executives rethinking value narratives, not just pricing. Investment in marketing, loyalty programs and partial digital service enhancements to counter Walmart’s broader reach and a refresh to the in-store experience. Thus far, the results among Dollar chains have been mixed with some facing structural challenges and competitive share loss. The Dollar Channel’s traditional strengths (low prices, convenient locations) remain relevant, but without comparable technology and fulfillment capabilities, they face challenges sustaining momentum against Walmart’s broad consumer appeal.

• eCommerce Platforms That Embrace Price Intelligence
  Retailers like Amazon that sprint on price intelligence and dynamic repricing will remain strong competitors. Their ability to match Walmart on price perception – while offering convenience and personalization – creates a potent combo for brands that can optimize across both platforms. However, this could be challenged as shoppers use AI platforms that disintermediate the shopper journey and AI platforms begin to serve up recommended assortment and purchase options. We will need to see how this unfolds.

• Grocery Retailers
  Grocers have viewed Walmart cautiously given Walmart’s dominance. Discount grocers like Aldi and Trader Joe’s have developed winning strategies to compete with Walmart. However, smaller grocers and regional formats must now retool their strategies to protect their share with affluent shoppers who perceive superior value at Walmart or Costco – especially online. What remains to be seen is who will pivot quickly enough to local assortment, experiential differentiators, and the use of AI for operational efficiency to hold share and profitability.

What Does This Shift Mean for CPG Strategy?
The Walmart shift highlights a broader reality: winning today requires more than brand equity or distribution. It demands:

• Pricing strategies that reflect real-time shopper behavior
• Integrated media and merchandising plans at retailer scale
• Innovation that balances premium perception with value deliverables and retail exclusivity expectations
• Channel-based strategies and joint big ideas

At Simpactful, we combine multi-functional brand experts and former retail executives with AI experts skilled in applying AI models to Revenue Growth Management across the channel.  Our team, comprised of former Walmart, Target, and Costco executives and multi-functional practitioners, helps brands navigate these forces with clarity – connecting strategy with sound analysis, plans, big idea development, and execution where it matters most – at the retailer shelf and in the digital path to purchase. Our team’s deep experience on both sides of the desk is elevated with AI to empower brands to solve simply and make a measurable impact – in pricing strategy, retail media performance, and omni-retailer execution. In a world where retailers are redefining “value” and shoppers are redefining loyalty, the brands that act decisively, collaboratively, and insightfully will be the ones that lead.

Simpactful can help! To strengthen your strategies and plans to win in today’s retail environment, contact us at contact@simpactful.com or 925-234-6394. Visit www.simpactful.com to learn more.