Wal-Mart’s New ‘Tude

By George Anderson
It wants more upscale shoppers without driving away its core consumers. It wants to be known for chic as well as cheap. It is Wal-Mart.
The retailer has recently announced a number of marketing deals it hopes will accomplish all of the above. Among these are an advertising campaign in the fashion magazine Vogue; an exclusive multi-year deal to sell music from country star Garth Brooks; as well as a holiday promotional deal with the recording group Destiny’s Child.
Wal-Mart has chosen to emphasize its apparel and music offerings in its bid to re-image itself, said the company’s chief marketing officer John Fleming.
Brand expert Allan Adamson told USA Today he thinks Wal-Mart may be on to something with its marketing initiatives. “Partnering with an icon like Vogue is smart, because they need to turn some heads if they want to turn that giant thing called the Wal-Mart brand image,” he said.
“We’re finding a lot of customers that haven’t shopped the department (clothing) before. We believe our assortment has improved in the last few years, and this is a way to get that message in the marketplace,” said Mr. Fleming.
It’s not too late for Wal-Mart to reshape its image and attract shoppers who may normally go to Target, said Mr. Adamson. “Target proved that value can be chic. Fashion and value are no longer mutually exclusive. Those two worlds are colliding, and everyone needs to get in the boat,” he said.
Target outspent Wal-Mart in marketing last year, according to figures from Ad Age cited in the USA Today piece. Target spent $904 million versus $841 million by Wal-Mart in 2004.
Moderator’s Comment: Are the latest moves by Wal-Mart moving it in the right direction? Does the product in the store live up to the image the retailer
is looking to create in its marketing?
An unofficial survey of fashion and music-conscious shoppers here revealed Wal-Mart would have done a lot better had it made a deal with Big & Rich
along with Cowboy Troy instead of Garth… and with the Black Eyed Peas rather than Destiny’s Child. Of course, those surveyed prefer to shop at Target instead of Wal-Mart. (Oops,
that’s the point isn’t it?) –
George Anderson – Moderator
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26 Comments on "Wal-Mart’s New ‘Tude"
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Wal-Mart has captured the majority of customers shopping for basement-priced products with its rustic-chic. Now it’s trying to climb up the quality ladder to catching more chic-value and even fashion-value sales with its association with Vogue, with its upgraded assortments, etc. That’s understandable and commendable but it will be challenging. Target has a solid hold on its customer audience with its contemporary fashion assortments, effervescent advertising and with its checkout associates who are more compatible with the “vogue” objective than are Wal-Mart’s.
Wal-Mart has “jumped the shark.” They are still the largest retailer ever and a force, but as Wall Street has realized (is there any hedge fund that isn’t selling them short?), their best days (growth-wise) are behind them. By the way, the customers they are not going to get know what “jumped the shark” means; the ones they have don’t. They should stick to who they are and face the fact that Target and Costco own the space they are after and won’t give it up.
Well, I guess both Wal-Mart and Target are recognizing the reduced discretionary income of their traditional customer and welcoming the “nouveau economy shopper” from the shrinking middle class. I understand Target bought out all the advertising in the last issue of New Yorker Magazine. It seems like both organizations are pursuing smart marketing strategies meant to widen their customer base and get more buyers into their stores. It certainly makes sense, but I think Target has a better chance to pull it off.
Wal-Mart needs to build internal boutiques to sell upscale clothes, with each boutique unit centered on a particular theme, with a dedicated register and a sales agent whose salary is partially tied to sales performance growth. Customers do like to shop with their own kind, as they are not only buying a garment but also a lifestyle image.
If Wal-Mart goes uptown, where will we shop for basics? I used to shop Target for basics. They don’t have them anymore. When it comes down to it, I don’t shop any of them for clothes, except some basics. When I do go into a store, it is because it is convenient. Kmart is closer to my home – I go there. Wal-Mart is closer to where I work – I go there. If I happen to be out near a Target, I go there. They are all so similar with product, it comes down to convenience!
So when Wal-Mart becomes upscale, who will enter the scene to be the new savior of regular folks and save them money on the basics? I think Wal-Mart is looking for trouble when they perceptively abandon their loyal following of lower income people who “bring home the bacon” week in and week out. Those people are smart enough to figure out when they’re being used, and they’ll take their loyalty to the dollar stores, Aldi’s, and just about anywhere else that conveniently sells what Wal-Mart does much faster than Wal-Mart thinks they will. Volume could easily drop by a bigger rock than it is now with so many of the loyal dollars going to gas and oil products. Oh, they can serve two masters well? That’ll be a first. Focus means focus on one thing. Trying to focus on two produces double-vision.
We have often called Wal-Mart the best marketer in retailing for their singular focus on a compelling positioning — Lowest Prices Everyday — or some version thereof. Everything about the consumer proposition supported that positioning and that uniformity of purpose is tremendously powerful. Now they risk losing that clarity — maybe.
The success or failure of their recent moves will turn on one question. Does Wal-Mart stand for “lowest prices on any given brand/quality/style” of jeans? Or does Wal-Mart simply stand for “Lowest prices on jeans” period? We think it the latter, but we’ll see.
“We believe our [clothing] assortment has improved in the last few years,” according to WM’s CMO John Fleming. Thanks for your strong conviction, Mr. Fleming. I, for one, am now totally convinced that lipstick looks good on a pig.
WM could learn from McDonald’s regarding image adjustments. Mickey sneaks up on changes with well-thought-out steps in a predetermined, long-term plan. Baby steps, always baby steps.
What I’m most curious about is WM’s plan to invite hitherto uninterested shoppers to their stores. Along with moving current customers into more upscale purchases, how are they going to attract new (skeptical, tuned-out) customers? This will be interesting.
Wal-Mart has shown time and time again that it has achieved whatever it set its mind to. However, this time, even they may be out of their league.
Looking at this using Maslow’s hierarchy of needs, Upscale shoppers are looking to satisfy more than their base needs. They are also looking to satisfy their esteem needs – dignity, status, etc. Target meets the Upscale shopper’s base needs by offering a lower price, while also meeting their esteem needs by providing a more cultured, polished and trendy look. I have never yet accused Wal-Mart of being cultured, polished or trendy.
Unless Wal-Mart virtually ceases being Wal-Mart and instead becomes Wal-Get (don’t forget to pronounce it as if it were a French company). I don’t think they will achieve much success in this venture.
Target (and even Kmart) have something Wal-Mart doesn’t have – designers. Target has Isaac and Kmart has Martha. I don’t even shop in the furniture or clothing departments at Wal-Mart because the merchandising doesn’t pull you in. Wal-Mart has a long way to go to catch up to Target.
Some of WM’s attempted repositioning through licensing and “alliances” is similar to the Martha Stewart tactics used by Kmart. Did those tactics change the entire positioning of the company? No, but they did sell a lot of merchandise. And it took years to build the momentum. Will WM stick to the strategy and a thorough implementation? Are its expectations reasonable, in view of the resources being devoted?
Bravo Bravolima, I couldn’t have said it better myself. I refuse to shop at Wal-Mart because the stores in my area are filthy, cluttered and overcrowded. Work on this problem and I may reconsider but, for now, I’ll stick with Target.
There is only so retail space on this earth that Wal-Mart can cover. I like the idea of Walmart.com going upscale, but the brick and mortar should march with, not over, their core base.
In my opinion, Wal-Mart will fall short of expectations in this area. There are just some things you cannot dress up and make better. Wal-Mart is one of them. I’ve noticed they have tried to dress up their store facilities a bit; they have upscaled the merchandise somewhat – but they will never be able to back it up with the personnel. Wal-Mart is Tobacco Road, not Park Avenue. Seems Wal-Mart is trying to be Target and Target is trying to be Wal-Mart. I think Wal-Mart should just try to be Wal-Mart.
Wal-Mart has proved that they are capable of just about anything. Key phrase here is ‘just about anything.’ It’s really rather silly, isn’t it? I’d think so. But when your objective is to conquer the world next week, nothing really sounds out of the realm of possibility. As silly as I think it is, I don’t count them out – period – on anything!
As others have stated, I will be quite surprised if Wal-Mart can pull this one off.
Target gets my vote. Some WMs are going to have to a major reorganization at store level. Efforts to keep your labor low is great, just up to the time that the store starts to look like a rummage sale at closing time.
Time will tell, but Target is already getting it done.
The retailing graveyard is littered with companies that decided it’d be a great idea to go “uptown.” Even if they manage to attract a more upscale customer, WM runs a serious risk of alienating their core customer. That’s usually what causes ruination – customer confusion.
I would be stunned and amazed if they actually pulled this one off.
The element here that surprises me the most is the connection to Vogue. When you think of Wal-Mart, and then you think of Vogue, your brain shuts down. Couldn’t they have picked a more likely suitor? Sure, Vogue stands for fashion, but in an extreme, supermodels-on-the-runway, $5,000 fur coat, totally inaccessible kind of way. If Wal-Mart had partnered with InStyle magazine, or DKNY, or any more mainstream or relevant fashion brand or institution, this whole venture would seem a little more believable. Frankly, I’m surprised Vogue agreed.
Different culture, image/consumer perception, consumer service level, consumer advertising campaign, and buying group, as well as design director are just a few of the major changes that Wal-Mart must adopt to be considered (and I didn’t say viable seller of chic cloths, etc.). A long haul can be anticipated, with many bumps in the road.
This is one business where WM’s distribution system, and greeter at the door, are ‘disconnects.’ Hmmmmmmmmmmm
In my opinion, Wal-Mart’s problem attracting upscale shoppers goes beyond product to experience. That includes customer service, store design and layout, displays and merchandising – experience.
I also believe Wal-Mart needs to evaluate its locations to see if they are places the “upscale” shopper will want to go.