Wal-Mart’s New ‘Tude

Discussion
Aug 25, 2005
George Anderson

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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Gene Hoffman
Guest
Gene Hoffman
15 years 6 months ago

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.

Michael Tesler
Guest
Michael Tesler
15 years 6 months ago

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.

Bill Bittner
Guest
Bill Bittner
15 years 6 months ago

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.

nat chiaffarano
Guest
nat chiaffarano
15 years 6 months ago

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.

Tatia Griffin
Guest
Tatia Griffin
15 years 6 months ago

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!

Sid Raisch
Guest
Sid Raisch
15 years 6 months ago

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.

Ben Ball
Guest
15 years 6 months ago

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.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
15 years 6 months ago

“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.

Don Van Zandt
Guest
Don Van Zandt
15 years 6 months ago
Other commentators have nailed the dichotomy at Wal-Mart. They understand and do hardlines well. Unfortunately, they don’t get “fashion” softlines. My 3 kids are typical middle America, ranging in age from 10-16. They never wanted to go to Wal-Mart to shop for clothes (and still don’t) but, when Target opened up, I couldn’t keep the oldest one out of the store. Even my son does not mind buying a few clothes there (as long as it is a short trip). Wal-Mart softlines departments have the racks overstuffed, too close together, and poorly merchandised from a fashion presentation standpoint when you compare them with Target. There are too many “basic” items that are not complemented well by a few oddball items that are supposed to be fashion. My family’s impression/perception is that the quality of the items (beyond basic jeans and tees) is better at Target. I don’t think that even Wal-Mart has the space to meet all the needs of price vs. fashion. If you drop some of the customers at the bottom end of… Read more »
Joe Delaney
Guest
Joe Delaney
15 years 6 months ago

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.

nelda jacobs
Guest
nelda jacobs
15 years 6 months ago

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.

Mark Lilien
Guest
15 years 6 months ago

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?

Kathy Grisz
Guest
Kathy Grisz
15 years 6 months ago

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.

Jack Smith
Guest
Jack Smith
15 years 6 months ago

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.

David Livingston
Guest
15 years 6 months ago

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.

Carol Spieckerman
Guest
15 years 6 months ago
I’ve seen vast improvements in Wal-Mart’s apparel area and, lately, those improvements have been more about making the good stuff more visible rather than hiding it in a mish-mash of private label. Much of Wal-Mart’s apparel is right on and I believe they definitely have the ability to capture additional better shoppers without alienating anyone – after all, shopping is aspirational and it’s not like they’re going to turn into Neiman’s! I blogged a while back about another obstacle that may prove harder to overcome – who is shopping alongside you at Wal-Mart? Customers are an often-ignored component of “store environment” and women in particular decide if they’re in the right place based on who they’re shopping WITH. Wal-Mart’s trend and presentation efforts can and will snag more bargain-hunting teens and those off to college along with adventurous Target shoppers and this alone will drive plenty of growth. However, Wal-Mart’s multi-generational, multi-ethnic, multi-purpose (getting a cheap price on diapers and getting out or loading up in multiple departments) customer make-up will forever exclude them from… Read more »
Mark Burr
Guest
15 years 6 months ago

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!

Greg Coghill
Guest
Greg Coghill
15 years 6 months ago

As others have stated, I will be quite surprised if Wal-Mart can pull this one off.

Bob Bridwell
Guest
Bob Bridwell
15 years 6 months ago

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.

Jack Pansegrau
Guest
Jack Pansegrau
15 years 6 months ago
I believe Wal-Mart can and will move up as it offers the merchandise that attracts more upscale shoppers, whether it is fashion, electronics, recreational gear, and more. Wal-Mart.com will be an important component of this move. Recently, when I wanted a GPS unit for hiking, I first checked REI but ended up saving nearly $100 at Wal-Mart.com for a top of line Garmin eTrex for $290 – that’s real savings. Costco had a single, entry-level Garmin unit – the typical drawback of Costco – limited selection. I discovered the same when I needed a wireless network router. I went first to Best Buy but checked out our Wal-Mart SuperCenter finding the exact same Linksys router for $79; $20 cheaper. And unlike Best Buy that seems to have a ‘national problem’ in answering their store phones, Wal-Mart always answers and can tell you their in-stock position. ‘Discovering’ these types of products (not available at Target), I have quickly learned to ‘check Wal-Mart first.’ As others discover the same for the products that appeal to them, Wal-Mart… Read more »
Paula Rosenblum
Guest
15 years 6 months ago

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.

Myles Gooding
Guest
Myles Gooding
15 years 6 months ago
Most of the comments ring true about a couple of important must-haves to become successful in a high end market. 1). Customer Service, which is more than just having personnel around the store but people who actually have product knowledge and passion (look to Nordstrom for the model). 2). Quality: high end consumers are typically more educated and understand the differences in quality and the true meaning of ‘you get what you pay for.’ Why purchase something cheap multiple times when you can buy quality that lasts longer. These two elements alone represent serious investment in resources, new product strategy, and a new twist on company culture. Large retailers that used to rival Wal-Mart attempted to re-invent themselves and, on average, were not completely successful. A classic example: Kmart and Sears. And how is this combined company doing? That’s another story. At the end of the day, the move is nothing more than ‘lipstick on a pig.’ Lesson: Stick to what made you successful in the first place and continue to improve on it.
Sara Aye
Guest
Sara Aye
15 years 6 months ago

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.

Stephan Kouzomis
Guest
Stephan Kouzomis
15 years 6 months ago

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

Nycole Kelly
Guest
Nycole Kelly
15 years 6 months ago

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.

willie griggs
Guest
willie griggs
15 years 1 month ago
Wal-Mart will make a good move in upscale retail offerings, because they will do it in both conventional and non-conventional routes. Just take a look at their grocery. Wal-Mart is now number one in the United States for all grocery sales. Ten years ago, they were taken somewhat seriously in grocery, but not that serious. But no one in grocery is laughing now, and now Wal-Mart’s interest is in improving grocery service and products, which are on an upward path, while they continue to grow market share. They are no longer a commodity only grocer, as they are now fresh baking (bake-off), have upped produce quality, and are thinking about expanding center store varieties. All upper tier grocer strategies. In grocery, as well as retail, their challenge of price/point to quality of offering was, and is in their image, and they are working on that pretty well now. They don’t believe you have to be a boutique to get boutique shoppers. This retail blending follows suit for Target too. I would never have expected to… Read more »
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