Wal-Mart's March into Financial Services Unsettling to Some

by Mark Friedman  on Monday, May. 12, 2014 12:00 am  

Wal-Mart’s latest expansion into the financial services sector includes offering customers money transfers and the ability to shop for auto insurance.

Targeting that audience could help attract customers. And Wal-Mart could use the boost. Wal-Mart’s same-store sales numbers have been slipping. In February, the retailer reported its fourth consecutive quarter of declining sales at stores that have been open at least a year, a key indicator of a retailer’s health.

“Wal-Mart is really putting on a full-court press as of late with a lot of different ideas and initiatives … centered on driving footsteps into the store,” said Jason Long, the owner of the Shift Marketing Group, a St. Louis marketing firm that works with suppliers.

And he said he thinks the service will entice people to come to the stores.

Auto Insurance

Wal-Mart’s Eckert said his company’s partnership with AutoInsurance.com also developed out of customers’ frustration with the auto insurance industry. “As we investigated, we found that there was no great service out there” allowing consumers to compare and shop for auto insurance policies, he said.

He said Wal-Mart felt it could make a difference.

In the pilot program in Pennsylvania in 2013, customers who used the website reduced their annual insurance cost by nearly $1,170 on average. Eckert said Wal-Mart is now focused on getting the insurance product nationwide.

Wal-Mart is always listening to the concerns of its customers and looking for ways to offer them more services, Eckert said.

Wal-Mart’s moves into the financial services sector have been “very strategic,” said Ben Jackson, senor analyst of prepaid advisory service of Mercator Advisory Group Inc. of Maynard, Massachusetts.

“Which is, of course what you’d expect from them,” Jackson said. “They understand where their business lies, and so they’re going to focus on those things that help them with that.”

Eckert said he couldn’t disclose any of the company’s future plans in the financial services sector.

“You’ll have to stay tuned,” he said.

 

 

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