Walmart, the well known supermarket, has a very successful cost-leadership strategy. They have a stunning reputation of selling an extremely wide variety of products at exceedingly cheap prices. While Walmart sells similar products as many stores like Target or the Real Canadian Superstore, such as food and clothing, Walmart’s key point of difference has been their cheap prices.
Recently, however, Walmart has announced that they will be entering into the banking industry. Now, that will certainly be a large point of difference. According to Fortune, Walmart tried to become a deposit-taking bank in the past but gave up in 2007 after an industry uproar. This time, however, they’re still trying to maintain their low cost system.
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Walmart, partnered with Green Dot, a corporation known for prepaid credit cards, is trying to reach a new brand of customers; households who do not usually use a bank. Due to the recession in the US, many people(particularly those who have weak credit) do not have access to banks as a result of tighter standards. GoBank, Walmart’s new checking services will provide access to “almost anyone over the age of 18 who passes an identification check” for a small fee.
“Walmart customers want easier ways to manage their everyday finances” claims Daniel Eckert, senior vice president of services. With an already launched low-fee money transfer service and pre-paid cards made possible by American Express, Walmart is on its way to branching out of the retail industry, reaching a whole new range of possible customers.