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Wal-Mart Distractions

Jim Prevor’s Perishable Pundit, September 12, 2006

When Wal-Mart announced that it was going to retool its stores over the next two years to focus on six target groups — Hispanics, African Americans, “empty-nesters/boomers,” affluent, suburban and rural shoppers — it was popularly portrayed as an end to Wal-Mart’s cookie-cutter format.

Yet the whole thing is really a quandary. First, although the idea is to drive “customer relevancy”, it was also explained that the approach would require the change of only around 3,000 items out of over 200,000 items sold by a typical Wal-Mart Supercenter.

This indicates that without any such change, Wal-Mart believes it is already selling 197,000 items per store relevant to people in these various groups!

Besides, Wal-Mart has traditionally empowered store managers to buy items they judged would appeal to the local community and, on a corporate level, has made a big deal of its “Store of the Community”. Wal-Mart even went so far as to have individual stores with rabbinical supervision over the appropriate perishable areas.

It is not clear whether this new program will supersede the “Store of the Community” program or complement it, but in many ways it sounds like a step backward, trying to broad-brush the issue, rather than deal with differentiation of shopper base head on.

In fact, the six categories sound just a hint like the pronouncements of a market research program on steroids, not real-life retail.

Hispanics, for example, sound like a target audience, but it is harder to do a store that appeals to both impoverished Mexicans whom just crossed the border and affluent Cubans whose parents fled Castro in 1959 than it is to create a store that would appeal to either of those groups and their Anglo neighbors.

And look at the overlap between the categories. Surely a lot of people who are “empty nester/boomers” also would fit into “affluent” and “suburban”. It just doesn’t feel like a merchandising-driven revamp.

I’ve urged Wal-Mart with its big Mexican operation and its experience with Mexican American shoppers to consider launching a separate concept targeted toward Mexicans. That might work.

The “Store of the Community” is the perfect idea. What happens is that Wal-Mart has gotten a little remiss in execution, as I reported here. So the answer is a more vigorous and rigorous approach to implementation.

These six categories are not specific enough to make Wal-Mart the shopping venue of choice for these groups, and yet are just specific enough to turn off others in the community who don’t fit the cookie cutter.

Wal-Mart’s low-price card is gold; all these things are distractions from the prime appeal.

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