Wal-Mart’s Super Sticky
By George Anderson
When it comes to keeping customers, no retailer does a better job than Wal-Mart. That is one of the findings from Retail Forward’s American ShopperScape 2005 report.
Wal-Mart, says Mandy Putnam, vice president and author of the ShopperScape report, is one very “sticky” retailer.
“Being a sticky retailer is a good thing,” she said. “It means that one’s patrons shop more often.”
Retail Forward determined the stickiness of a given retailer by “examining the percentage of the past six month shoppers patronizing a particular store in the past four weeks.”
On a scale of one to 10 (10 being the best), Wal-Mart’s Supercenters were the stickiest of the sticky with a score of eight.
Supermarkets also achieved high scores. According to a release from Retail Forward, “90 percent of consumers shopping a particular conventional supermarket in the past six months can be found shopping at the same store in the past four weeks.”
A retailer’s stickiness is directly tied to its merchandise mix. Food stores, obviously, inspire continual purchases while others such as specialty apparel are visited on a less frequent basis. Stickiness is also determined in a number of retail channels by seasonal influences on their business.
“What’s most significant is that a retailer’s relative stickiness within its line of trade demonstrates its power to attract customers and provides the retailer with more ‘at bats’ with those customers. The retailers that have high stickiness percentages have a better chance of success,” said Ms. Putnam.
Retail Forward’s research found that Victoria’s Secret had the highest stickiness rating among specialty apparel stores, Babies ‘R’ Us did best in children’s apparel and Hallmark was the most effective in the gift and greeting card store segment.
Moderator’s Comment: Which retailers would get your vote for being super sticky (you choose the retailing segment)? What about them makes customers want
to continue doing business with them on an on-going basis?
– George Anderson – Moderator
I just love that news release talking about Wal-Mart shoppers in the “low-cost replenishment” mode.
I made my semi-annual visit to the local Wal-Mart on Sunday evening. It was a truly lackluster shopping experience — dirty (and sticky) floors, multiple employees blocking aisles with pallets, and other associates who could barely speak English struggling to direct me to the part of the store where 300-threadcount sheets might be shelved.
But, yes, the checkout lanes were teeming with folks in the low-cost replenishment mode — though I’m certain that less than 1 percent of the consumers on site would have recognized the term.
But, for stickiness, I’d nominate Starbucks in the high-cost replenishment mode for caffeine addicts. Honorable mention to Amazon and eBay.
Retail Forward’s information does beg the question, “Is the retailer, effectively targeting and securing its DESIRED, primary consumer?” If yes, any retailer is making profits due to the repeat purchase, and non essential purchases of such shoppers.
But our retail grocery community is in a separate world from all other retailers. One reason is consumers must eat every day (as clothing, medicine, paint, etc. are not as frequently needed). When you deal with a powerhouse like Wal-Mart supercenters,
the universe of consumers are usually middle income and below. WM, hence, makes money on this sector, and it’s buying power from suppliers! So the rest of the food, meal, and grocery shoppers are the other consumers that a Publix, Wegmans, Dominick’s, Kroger, the new Food Lion, Whole Foods, etc., target. Yes price and location are critical; but the upper middle income shopper spends on high ticket and high margin food, meals and groceries; and likes service and informed sales personnel!
As for the non grocery retailers (from Nordstrom to Target, Starbucks, Barnes & Noble, Walgreens, etc.) that provide all the other products, e.g.: drugs, clothing, paints, cars, sports equipment, crafts, non food essentials, SERVICE and knowledgeable sales people, importantly, joins appropriate pricing, location, and time allotted by the consumer. One might suggest, Service and Knowledgeable Help are as critical as price.
Hence, you could then say Starbucks, Walgreens (for prescriptions, mainly), Target, Volvo and Lexus dealers, Brooks Bros., Pottery Barn, PetSmart, a consumer-oriented catered wine shop, would have the most favorable repurchase rate.
Home Depot, to me, is the Wal-Mart of what HD sells, with service. Hmmmmmmmmm.
It’s not often in a retail forum that the words “stickiness rating” and “Victoria’s Secret” appear together.
On a more appropriate note, supermarket stickiness also has to do with the shopping habits adopted by customers due to personal economic conditions, and the retailers that cater to them. When, how, and how much they are paid are paid is important, and those with lower incomes who may get paid weekly in cash or with a personal check tend to shop more frequently and avoid periodic stock-up trips.
But, the stickiest retailers include neighborhood bars and casinos of all kinds, which I’m guessing were not measured. Additionally, retailers of illegal drugs are also pretty sticky, as well as check-cashing outlets, C-stores, and illegal gambling operations. The customer “regulars” for these businesses come back, because everybody knows their name.
Target has my vote, as it is always a pleasant experience rather than a chore. The stores are clean and easy to negotiate, the prices are very competitive with Wal-Mart and the team members pleasant and helpful. (Does anyone really work the floor at Wal-Mart or are they only at the checkout?) I always purchase more than originally planned, because I enjoy perusing all the aisles. I’m just another consumer who would rather drive several extra miles to Target than visit the nearby Wal-Mart.
Definitely Lexus dealerships. Home Depot rates up there too. Lately, Dairy Queen, at least in my Wisconsin Neighborhood, and McDonald’s cannot be overlooked. …And all the variables price, location, etc do apply. For my particular case, I have to say merchandise selection and promise fulfillment. Some people call it experience.
eBay is a standout sticky store, because it is the only one mentioned that advertises the sticky behavior of the participants. Each bidder and seller shows everyone their number of feedback incidents, and even a casual surfer of eBay ought to be impressed with the great proportion of multiple-return participants.
Side note about HD: Its performance is uneven. When I tried to return paint a few months ago to a location open on a Sunday (the location where I bought the paint is closed Sundays due to blue laws), the store manager on duty explained to me that his bonus would be negatively effected by a mixed paint return, so he ordered me to take it back to the original location that mixed it. They did take it back, but I noticed recently they’ve posted a sign saying “custom mixed paint not returnable.” The sign is handwritten with a pen on a piece of paper torn from a spiral bound book. The sign was not in the paint department; it was in the returns department. So I guess the bonus plan policy is spreading.
I have to disagree about Home Depot — I go there when Lowe’s doesn’t have something (HD has a better selection of outdoor paving products), but Lowe’s has friendlier and more knowledgeable associates (at least in my area), and a more intuitive layout and merchandising system. HD will have one cashier in their garden center on a busy Friday evening in May, despite having four registers in the department. It therefore often takes 15 minutes to pay for purchases out there (and if you have a giant 500-pound cart of concrete blocks, you don’t want to push it into the store).
My vote for sticky retailer is Whole Foods. After the California grocery strike, a lot of people didn’t go back to Ralph’s or Von’s — they stayed where the produce was prettiest (if somewhat pricier).
Also, don’t forget Target — for us WMT-phobes, they’re just as sticky as WMT is for its customers (and Target’s floors are not sticky, and their lighting is never dingy). And rarely is there anyone blocking the aisles with pallets.
My first four votes for super sticky retailers go to Wal-Mart, the Lexus dealer, Starbucks and McDonald’s. Next in my voting line-up are Costco, Home Depot, Target – plus one that is not in my daily perview – Victoria’s Secret.
Reason: They all consistently deliver on their promise. Wal-Mart, for being the undisputed everyday PRICE leader; Lexus for superb and consistent product QUALITY; Starbucks for great COFFEE and a “sweet” social experience; and McDonald’s for tasty fast food (together with its guaranteed calorie enhancing) DEPENDABILITY.
In the outdoor products channel my vote goes to Cabela’s. Notwithstanding their huge catalog and online volume, you just don’t find many retail outlets that can cause parking lots full of campers and mobile homes who have traveled to the store as a destination. Not to mention that entire “villages” of hotels and restaurants seem to appear around their relatively remote retail superstore locations.
But my pick of the day has to go to Home Depot in the DIY channel. If location and selection are the prerequisites for “stickiness,” then customer service is the tie-breaker. If my personal experience is representative, this is where Home Depot is really getting it’s act together.
I recently purchased three gallons of Behr paint, this after purchasing multiple quart samples to test shades, etc. When applying final coats, I realized I had overcompensated for a low light situation in choosing to use a semi-gloss finish. Back to the HD paint counter. First they checked all the formulas to be sure it wasn’t “their mistake.” Then Behr technical service was called to see what could be done to fix MY mistake. Answer, “No problem, Mr. Ball. We’ll just buy those three gallons back and replace them with the same color in the satin base you need. Here’s your file number to include with the refund claim.”
WOW! I’m stuck like glue…
Costco and Aldi are two that come to mind. I work with supermarkets and, when a dollar is lost to either of those two, it’s lost forever. It’s gone and it’s not coming back. It’s a lot cheaper and easier to buy back lost sales from certain retailers relative to others. When sales are lost to a Wal-Mart, Costco, Aldi etc, there is no point in wasting resources in trying to win those dollars back. Instead it’s better to focus on competitors that won’t put up much of a fight. We don’t have to name them but they are the ones who are in bankruptcy or in a downsizing mode.
Starbucks – Their “stickiness” is created by location and the experience. We all have other retailers we visit on a regular basis, such as a c-store or bank, that has stickiness only because of location. What makes the Wal-Mart number interesting is the fact that the average consumer will pass other stores on the way to a Wal-Mart. If this number is so good, and we have no reason to doubt it, then maybe it says Wal-Mart’s strategy of opening up Supercenters close enough to cannibalize existing units may not be the optimal strategy….. If Wal-Mart truly has the stickiest consumer, it also means they should continue to expand the services they offer.
My vote for the “stickiest store” has to go to Target. I have been a fan of this store ever since my first visit. The stores are bright, colorful, have a fun atmosphere and are customer friendly. One can go into the store feeling blue and walk out feeling good. The merchandise, while not being very high quality, seems to be better than Wal-Mart’s. And the selection and upbeat styles can’t be beat. I get a good feeling just thinking of Target. I love this store.