Understanding the Wal-Mart Shopper
By Al McClain
Exactly who is the Wal-Mart shopper?
The easy answer might be everybody, but Todd Hale, SVP – Consumer Insights, ACNielsen, gave a more specific profile, largely based on Nielsen Homescan information, at the recent
Consumer 360 Conference.
Here are some highlights from the highly detailed presentation (my comments in italics):
- In the U.S. Wal-Mart is shopped by 84% of households, compared with 58% for Kmart, and 56% for Target
- Wal-Mart is Fortune’s ‘most admired company,’ for the second year in a row – ironic with all the bad P.R. they get
- Wal-Mart Supercenters will outnumber its discount stores sometime this year.
- A Supercenter focus is driving Wal-Mart’s success in the U.S., via higher shopper penetration, increased shopping frequency, and larger basket rings
- Wal-Mart has 1.4 MM employees versus 1.3 MM for the U.S. Military
- Annual turnover is 44%
- They’ll be adding 160,000 new positions in 2004
- Wal-Mart saves consumers an estimated $ 20 B annually
- Wal-Mart drives up to 25% of the market’s productivity gains
- Regular Wal-Mart shoppers are still making lots of trips to supermarkets, although heavier Wal-Mart shoppers naturally spend less in other stores
- The dollar channel is the only one seemingly immune to Wal-Mart, as they are convenient, low-priced, and provide for a quick trip — immune that is, until Wal-Mart makes
a competitive move
- Convenience and location are especially important to non Wal-Mart shoppers — these are two of just a handful of factors that tilt in competitors’ favor, indicating having
an outstanding real estate department is critical
- Wal-Mart’s growth is beginning to tilt towards improved frequency and loyalty, versus just new stores
- Opportunities for Wal-Mart competitors exist in perishable variety, specialty grocery, and special niches — because Wal-Mart is mainstream oriented
- Among Wal-Mart top shoppers, largest negative category trip categories (more trips to competitors than Wal-Mart) include: bread and baked goods, milk, carbonated beverages,
tobacco, fresh produce, snacks, packaged meats, condiments/gravies, cheese, candy — largest gaps are in high frequency and immediately consumable categories, indicating big
box shopping isn’t always convenient
- Largest positive trip gap categories include medications, disposable diapers, hair care, oral hygiene, vitamins, skin care, diet aids, pet care, stationery and school supplies,
- The future for Wal-Mart: Aggressive expansion, especially with Supercenters; extra services including gas, rental cars, Kid Connection, Wal-Mart TV Network (in-store), and
financial services. Plus, better fashion focus; Neighborhood Market expansion; testing of Kicks Café coffee and ‘Dollar Store’ boutiques.
Moderator’s Comment: Assuming Wal-Mart continues to grow and expand at a rapid pace, how can other retailers succeed,
and how should suppliers balance their desire to sell more to Wal-Mart with the need to keep the playing field competitive?
As the population ages, it seems to me there is a tremendous opportunity for retailers to focus on location, cleanliness, and convenience, as those things
are of paramount importance to the aging consumer. Only thing is, price seemingly trumps everything. –
Al McClain – Moderator