Can Walmart Win Beauty With Better Service? | Fast Five Shorts

Walmart is breaking out of its historically no frills service model by staffing its beauty aisles with trained specialists, AKA beauty experts.

Again, enjoy Tripani air quotes who can recommend foundation shades, flag what's trending on TikTok, and offer personalized skincare advice as part of a broader play for a bigger slice of the $129 billion US Beauty and Personal care market.

According to the Associated Press, the beauty expert roles were piloted at 22 stores in Arkansas and Texas in recent and Walmart expects to have them in more than 400 of its 4,600 namesake US stores by year end.

As part of a broader remodel of 650 stores.

Walmart is also moving beauty departments to the front of stores and installing displays to showcase products getting buzzed on social media, said Vanima Shekar, VP of beauty merchandising for Walmart's US Division.

Quote we're not trying to be an Ulta or Sephora.

We have the breadth of assortment that no one else has.

We have the convenience that no one else has.

What we also want to do is layer on a level of service, end quote.

Jen this is also the A and M Put yout on the Spot Question of the Week because I think they knew you were going to be guest hosting with me and here it is.

While in store, human beauty advisors have maintained consumer trust for recommendations.

Nearly 30% of beauty customers are now using AI to discover new products and brands, and roughly the same percentage to research.

Given that, how should Walmart and other beauty retailers determine where human expertise creates real competitive advantage against AI?

Hey, better you than me.

Again, they put you on the spot questions are always so long.

I'm like, well which question do I answer first?

A and M. Yeah.

Very thoughtful.

They're very thoughtful questions.

They take a lot of time to do them every week.

It's very appreciated by me.

It makes you, makes you really think.

Yes.

Okay, so the question is how to layer in in person service and where that could probably make a difference versus agentic AI and and research at home.

Right.

I think in Walmart's case and then we'll go back.

If I don't answer that question for A and M, let me know because I'll be more clear.

But I think in Walmart's case, I love that they're saying they're not trying to be Sephora, they're not trying to be Ulta, they just know who they are.

And the fir.

When I first read this I was like, what are we doing?

What is Walmart doing adding this beauty layer that Estee Lauder is getting rid of.

Right.

But as I read further, I was like, this is not some fancy beauty counter trying to pretend there's something they're not.

This is simply just better service.

Yeah.

And if there is one thing that I think Walmart should be investing in, it's better service.

Because if you finally get people to step inside your store, you don't want them wandering up and down that beauty aisle.

You want someone that can say, hey, do you know what's hot?

You know, did you know this is the viral concealer?

I, I'm very curious on how they're going to staff that, who they're going to hire, what their ideal candidate looks like.

Because it should be like a, a TikTok, you know, it should be a Gen Z, someone that knows what they're talking about, wants to engage the customers.

But I think this is very different than research at home via AI.

Like makeup is something where, like if you can see the shade on your skin it's helpful.

And I also think this might be a different customer than the one that is purchasing through AI.

At least today there's still a hesitancy with AI.

We use it so much as business owners and in the industry, but consumers.

I would say the average consumer in a Walmart store isn't probably on the cutting edge of shopping for makeup through Claude or through ChatGPT or whatever it might be.

So will you read me the last part of A M's question again, Chris, just so I make sure I answered it?

Sure, yeah, I think, I think you've answered it for the most part.

But you know, I think they said, you know, how should Walmart and other beauty retailers determine where human expertise creates real competitive advantage against AI?

Yeah, well, human expertise and I'm gonna just die on this hill if I have to.

We can't forget about it with AI I just don't think it's going to be replaced.

I think AI help those beauty consultants, we'll call them with better recommendations and more information and make their job easier.

But a human sharing experience or information in the aisle of a physical store is so very important and, and AI is not going to replace that, at least not in the near future, in my opinion.

Yep.

Yeah, yeah, that I think, I think you nailed it, Jen.

Like, I think, I think of, I think of, I think it's both can exist, you know, like you can be shopping more with AI, but there's still a component of in person service that is, that is also going to be important.

And the way I think about it, too, and this was my biggest takeaway coming out of the World Retail Congress in Berlin last week, is that we spend a lot of time talking about how generative AI is going to make our experiences more human.

And that doesn't mean necessarily more person to person, like actual physical person to person, but more human in their bend, is how I'd put that.

And an experience can be more human because of digital.

So, Jen, when I extrapolate, what you say is, yeah, I start my journey online.

I probably engage with Walmart online with Sparky, and he offers me some advice.

That information is then transferred to the associate in the long term.

This is like the vision.

That information is then transferred to the associate who's helping me in the store.

And therefore I can understand the consumer better and provide better service to them both digitally and in store, in theory.

And that's where AI is taking us.

And I think that's the, that's the key point here.

The other thing I love, and then I'm going to get on my soapbox for a little bit and share an anecdote to Jen is I love how you said that if I was Walmart, I'd be investing in service.

Yeah, I think, I think I would be too.

Like, I'd be taking all my retail media dollars, the billions of billions of dollars that I'm getting generated from retail media, and that's exactly where I'd be investing it is in things like this to provide better service.

And service can come in many forms.

It can become in the beauty area.

It can come from making sure the shelves are stocked right.

Like, it can come in all different shapes and sizes.

But that's a smart place to invest.

The other thing.

So now the soapbox, I'm buying this.

Hook, eyeliner and sinker, Jen.

Hook, eyeliner and sinker.

I'm buying this because the anecdote I want to share is back in 2009, I was being recruited by a former mentor of mine at the Gap, who was then at Baby's R Us, to come and join our team.

When I was running Baby for Target, and at the time, the baby business was Babies R Us, Target and Walmart, and we got into a discussion.

I remember we were over dinner and we were talking about what really makes Walmart different from Target or Target different than Walmart at the time.

And I told her, in my opinion, Jen, I said, not much.

The only thing that makes Target different than Walmart at that time is that Walmart has to believe they can do what Target does and they have to have a commitment to execute on it.

That's the only difference.

And Walmart plus, in my opinion, Jen, has been the lightning rod that has given Walmart the belief in themselves that save money, live better, can be the expect more, pay less promise of the 21st century.

And I think you're seeing it play out here, you're seeing it play out in store redesign.

Their marketing is doing that as well.

I mean, their CMO is X Target.

So I, I see no reason why this isn't going to be successful as a strategy, particularly as beauty still drives traffic to stores and macroeconomic pressures, let's not forget, are not abating one bit.

So people that are desirous of beauty products are probably going to end up finding themselves in a Walmart part and parcel more often than they were in the past few years.

Yes.

And you know, the other piece that was mentioned in the article here is the breadth.

Like no one has the breath, they have, no one has the access, they have the scale.

And so I think there's a real opportunity here that obviously they've recognized and they've tested it in 22 stores.

I have to think that they've already gone through this pilot in 2020, and not 2022 stores, but in 22 stores they saw something they liked.

Right.

My thought goes to how on earth do you train that specific of a position if you're used to being Walmart, where it's like stock and answer questions.

Right.

Like, and I don't want to simplify it, but that's kind of what their people have been responsible for in store.

Instead you're now asking this person to be more consultative, know their product really well.

No one was expected to know Walmart product really well because there's so much of it.

But I would say that that will be a challenge.

But that's where I would lean into AI.

Right.

Like if you have, if you have a bot trained, if you have internal systems where this, this beauty consultant logs in that day and it's like, what's hot?

And there's like 18 products they need to know really well, then we're not asking them to be the expert, we're giving them the tools to be the expert and you can elevate service pretty quickly in that way.

Yeah.

So, but I like what you said about the difference between Target and Walmart too.

It's just the major differences is what Walmart has perceived themselves to be and therefore behaves like in store.

Right?

Exactly.

Right.

That's the only difference.

It's your own per self perception that we're talking about here.

And, and, and the other reason that I think this, they've been experimenting with this exact idea in Canada.

I saw it firsthand, especially where they move, where they're moving the beauty department.

So, so they've got a lot of understanding to know that this is going to work.

And the other point, Jen, about training, you can lean on the cpgs.

The cpgs have so much training on this because they're doing it in department stores all the time, like we just talked about.

And they're doing it to a lesser degree.

And they've rolled it out to other places like Target, Sephora, Ulta.

Like, this is not an uncommon practice.

It's just a muscle that Walmart has to decide to exercise.

And I think there's no reason why they shouldn't be able to exercise it correctly.