When most people think of Walmart, they picture endless aisles stocked with groceries and everyday essentials. But there‘s another side to the retail behemoth that fewer appreciate: Walmart is also the undisputed king of affordable general merchandise. From clothing to electronics to home goods and beyond, Walmart sells an astounding range of "non-grocery" products that totaled over $180 billion in sales last year alone.
In this deep dive, we‘ll take a data-driven look inside the world of Walmart‘s general merchandise operation. We‘ll explore the key categories, the unique merchandising strategies, and how Walmart stacks up to rivals like Amazon and Target. Plus, we‘ll evaluate the shopping experience through the critical lens of a retail industry expert and picky consumer.
Unpacking the Walmart General Merchandise Machine
First, let‘s define what we mean by "general merchandise" at Walmart. Essentially, it encompasses every product category outside of grocery, health and wellness items, and fuel. The major departments include:
- Apparel and accessories
- Home furnishings, decor, and housewares
- Electronics and entertainment
- Toys and video games
- Sporting goods and outdoor living
- Seasonal items
- Arts, crafts, party supplies, and greeting cards
- Auto care and hardware
Walmart doesn‘t breakout sales for each of these categories. But we can piece together a rough sketch of the biggest departments:
| Category | Estimated Annual Sales |
|---|---|
| Apparel & Accessories | $25 billion |
| Home & Housewares | $50 billion |
| Electronics & Entertainment | $45 billion |
| Hardlines (auto, toys, sporting goods, etc.) | $35 billion |
| Seasonal & Other | $25 billion |
Sources: Walmart financial reports, author estimates
While grocery still comprises the majority (56%) of Walmart‘s sales, general merchandise now accounts for nearly a third of the company‘s $570 billion top line. Apparel and home goods are the twin pillars, combining for over $75 billion in sales. That‘s more than the total revenue of Macy‘s, Kohl‘s, and Nordstrom combined.
So how has Walmart built this general merchandise juggernaut? It comes down to three key ingredients: aggressive value pricing, a massive selection, and relentless merchandising optimization.
Walmart‘s Not-So-Secret Sauces: Price & Assortment
Walmart‘s unrivaled scale allows it to pressure suppliers for the lowest possible wholesale prices and terms. Case in point: Walmart is the largest customer for consumer products giants like Procter & Gamble and Hasbro, accounting for over 15% of their total sales. This gives Walmart tremendous bargaining leverage to undercut rivals on price.
What‘s more, Walmart increasingly sources products directly from manufacturers, bypassing more expensive brand-name suppliers. Roughly 20% of Walmart‘s general merchandise now comes from private label goods sold under brands like Mainstays, Wonder Nation, and Onn. By controlling more of the supply chain, Walmart can secure even lower costs.
The result is very competitive "everyday low prices" on a huge range of general merchandise products. A recent study by retail analytics firm Profitero found that Walmart had the lowest prices on a basket of 2,000 best-selling items compared to Amazon, Target, and Wayfair. Walmart‘s average prices were 5-10% lower than Amazon‘s in categories like housewares, electronics, and baby products.
But low prices are only part of the equation. Selection is just as important, and Walmart offers an unmatched breadth and depth of general merchandise. The typical Walmart Supercenter stocks over 120,000 individual items. Walmart‘s expanding e-commerce business now offers more than 75 million products, including a vast marketplace with goods from over 110,000 third-party sellers.
The Art and Science of Merchandising the Mart
Of course, the "stuff" doesn‘t sell itself. Walmart‘s general merchandise merchandising operation is a sight to behold. Every inch of shelf space in stores is meticulously planned with an eye towards maximizing sales per square foot. Products are placed, priced, promoted and presented based on reams of data and shopper insights.
A small army of Walmart merchants oversees this constantly churning machine. The company employs hundreds of buyers, along with planning managers and pricing analysts, who work to curate and optimize the product assortment both in-stores and online. Advanced analytics tools crunch petabytes of sales and inventory data to generate "smart" stocking levels, replenishment triggers, and more.
Walmart‘s newest weapon is virtual reality. In 2021, the retailer unveiled a VR merchandising tool that allows merchants to visualize and simulate store layouts, displays, and modular arrangements before implementing them in real life. This technology has already been used to revamp key departments like electronics, toys, and home decor.
The goal of all this investment and innovation is to create a general merchandise presentation that is economical, engaging and exciting for shoppers. And by most measures, it‘s working.
Stacking Up Against Amazon and Other Rivals
Make no mistake, Walmart faces fierce competition for consumer general merchandise dollars. Amazon has made huge inroads, now capturing nearly 10% of total GM retail sales according to research firm eMarketer. The e-commerce juggernaut has become the go-to destination for many shoppers looking to buy electronics, small appliances, and home goods online.
Target is another thorn in Walmart‘s side, especially when it comes to higher-margin categories like apparel and home decor. Once dingy and dowdy, Target has reinvented itself as a purveyor of cheap-chic style through elevated private label lines and on-trend merchandising. Target‘s "Tarzhay" cachet has allowed it to capture share from Walmart among more affluent and fashion-forward shoppers.
Still, Walmart remains the overall general merchandise leader thanks to its unrivaled price positioning and store footprint. Walmart commands roughly 11% market share across major "non-grocery" categories, more than double that of closest rival Target. In apparel, Walmart now does more volume than Macy‘s, Kohl‘s, T.J. Maxx, and Target combined.
And while Walmart may still trail Amazon online, it is investing aggressively to close the gap. Walmart‘s U.S. e-commerce sales surged 79% last year, topping $64 billion. The retailer now offers over 1 million general merchandise items for same-day delivery from stores, often at lower prices than Amazon. Free curbside pickup is another popular option for digital GM orders.
A Picky Shopper‘s Perspective
As a veteran retail industry analyst and admittedly persnickety consumer, I‘ve studied Walmart for decades and shopped its aisles more times than I care to admit. So how does the general merchandise experience stack up through my critical lens?
On price and value, Walmart is undeniably tough to beat. I‘ve compared receipts and found that Walmart is consistently 5-15% cheaper than Target and Amazon on identical general merchandise items, sometimes more during key promotions. For cost-conscious shoppers on a budget, Walmart is often the clear choice.
Assortment is another clear advantage. Walmart‘s massive Supercenters offer a one-stop shop where you can find everything from socks to skillets to Skylanders. The 120,000 square foot stores can be overwhelming, but you‘re hard pressed to walk out empty-handed. And the endless aisles online now provide the added convenience of home delivery and pickup.
Where Walmart falls short, in my view, is on the more premium end of general merchandise. The clothing feels inexpensive and basic, lacking the style and quality of rivals like Target. The home decor is heavy on price-value items, without as much flair or inspiration as you might find at, say, HomeGoods. And the electronics department, while well-stocked, doesn‘t offer the high-touch service or expertise of a Best Buy.
Walmart has taken steps to address some of these shortcomings. The company has launched celebrity-driven clothing lines and an elevated home brand called Thomasville. A new electronics experience, with interactive displays and expert associates, has been unveiled in select stores. But catching up to specialists will be a long road.
Future of Walmart General Merchandise
So where is this retail behemoth headed in the coming years? Walmart has made it clear that general merchandise remains a strategic priority and key growth vector for the overall business.
E-commerce will be perhaps the biggest focus and battleground with Amazon. Walmart will continue to invest heavily in digital capabilities to make shopping seamlessly omnichannel. Same-day delivery will expand. Virtual try-on and visual search tools will enhance the digital browsing experience. And Walmart will likely acquire more native e-commerce general merchandise brands like it did with Bonobos and Modcloth.
In stores, Walmart will keep refining the merchandising approach to optimize the product mix and presentation. More space will likely go towards higher-margin categories like apparel and home, which are also key to driving online growth. And the company will use technology like VR and AI to hyper-locally customize assortments and keep shelves stocked.
The ultimate goal is to offer an unrivaled combination of value, selection, and convenience across all general merchandise categories—both in-stores and online. It won‘t be easy in the face of stiff competition. But Walmart has the scale, the resources, and the expertise to keep pushing the envelope and taking share.
For consumers, this means more choices and better prices are likely on the horizon. As a savvy shopper myself, I‘m excited to see how Walmart‘s general merchandise machine continues to evolve. It promises to be an interesting ride for retail watchers and bargain hunters alike.
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