Don't be surprised if Walmart enters Tik Tok
The agreement with Tik Tok for Walmart is an opportunity to take a slice of the fastest-growing social media and attract new generations of consumers, writes the founder of Retail Hub. We are moving towards omnichannel integration and the largest retailer in the world could not stand by and watch.
Some amazement was raised at the news of the willingness to purchase (in consortium with Oracle) a stake in the American division of Tik Tok by Walmart. But this is certainly not the first time that Walmart has made a "bold move" to accelerate skills (and customers) that are not part of its essence as a big-box retailer.
It's no secret that a long time Walmart is trying to attract those generations who do not exactly have the cult of "Everyday low price" (which for decades the largest physical retailer in the world has professed), but are closer to the logic of a circular economy or, even more simply, do not want shop where parents and grandparents shop. And it is not new either because CEO Doug McMillon he openly stated this during the last NRF (January 2020), both for all the moves made in recent years.
Going back in its recent history we find the acquisition of Jet.com in 2016 for 3.3 billions to be able to enter the world of e-commerce (on certain categories of customers not attracted to walmart.com) from the front door. Except then, integrated all the skills, choose to close this unit months ago. Or the choice of taking Bonobos in 2017 for 310 million dollars, above all to be able to better understand the omnichannel logic of a reality born to have physical stores without a warehouse. Not to mention FlipKart, bought for the "modest" figure of 16 billion, with the aim of penetrating the Indian market faster than Amazon.
From this point of view it seems less surprising the choice of this giant to take the opportunity to take a slice of the social media with the highest growth rate, especially among the under 40s.
A mix of skills acquisition, different approach to different generations and integration towards growth in the digital world: these in a nutshell are the reasons for Walmart's move
But the truth is that the whole industry is evolving towards omnichannel integration, where digital agora play an increasingly important role. Suffice it to observe, for example, the growth of video commerce in recent months (especially in China), or the new “Drive to store” strategies based on geolocated actions through IG and Facebook (among others). In short, how long could the largest retailer in the world have been able to stand by the window, leaving to others the control of this now fundamental part of the customer journey?
Therefore, although we must start from the principle that very few economically sound companies like Walmart could afford investments of this size to do R&D, I believe that, once again, this retailer made an excellent choice in taking the Tik Tok 7.5% ...
Walmart CEO Doug McMillon Is Playing Two-Team Championship For Global Retail Domination With Amazon
Last note worth pointing out is the fact that, with this M&A action, the Walmart CEO has won a seat on the board of Tik Tok Global: not trivial, especially if you think that your next success (or your next threat) can come from the country of renminbi.
By Massimo Volpe, Co-founder Retail Hub
Source: Economy Up