business news in context, analysis with attitude

Walmart yesterday announced the launch of its “Pay with Cash” offering for online orders at in the United States, saying that it will “help millions who rely on cash transactions, as well as those who are wary of using credit cards online, to shop Walmart’s affordable and expanded online merchandise.”

Here’s how it works: “Customers go to from any Internet-connected device to select an item and place an order. During checkout, the customer selects the ‘cash’ option and their shipping preference. Customer immediately receives an order number on the order confirmation page and an email receipt with their order number. The item is reserved in the system. The customer has 48-hours to take the printed order form to any cash register of any Walmart store or Neighborhood Market. Once cash payment is completed in the store and received, shipping then occurs via Site to Store or to their preferred address.”

Walmart says that “the majority of transactions are paid for in cash or cash equivalent, including debit cards” at its stores, and that just 15 percent of transactions are paid in the form of credit. Furthermore, the retailer notes that “according to the FDIC, one in four U.S. households fall into the unbanked and underbanked categories where they don’t have a bank account or credit card or have limited banking options, and often rely on cash as a form of payment for purchases. However, many of them are online, with 81 percent of the unbanked and 63 percent of the underbanked having Internet access.”
KC's View:
No surprise that Walmart would want to move in this direction. After all, recent revelations about its mexico operations suggest that the retailer is very comfortable with the notion of cash payments. Especially, it seems, if the transaction is made under the table...

But seriously, folks...

I have two observations about this.

One. By targeting people who do not use traditional banking services but want to shop online, Walmart is both targeting its sweet spot and going after a customer demographic that I’m not sure is on Amazon’s radar. So this makes sense. Now, I’m not sure if Amazon will fashion a response, or whether it will just allow Walmart to have this part of the online shopping demographic, preferring to market to people with bank accounts, debit cards and credit cards.

Two. It strikes me that this is a perfect example of how tone-deaf the folks in Bentonville can be. Sure, this is a good news story, but if I were in the PR department there, I would have urged the company to avoid for a couple of weeks generating any headlines that put the company’s name and the word “cash” in the same sentence, in part because it allows wisenheimers like me to make jokes like I did above.