Wal-Mart challenges its own status quo
By Maria Weiskott -- Home Accents Today, 5/1/2006
If anyone thinks the world's largest retailer has reached critical mass; think again. And to those who believe they can legislate Wal-Mart out of communities, Wal-Mart CEO Lee Scott advises they're in for a significant challenge.
"It's going to be tough to legislate Wal-Mart out of communities," the executive told members of the media invited to a two-day conference to hear directly from the retailer where it is headed.
"Just because a few select people don't want Wal-Mart, it doesn't mean we won't go there," Scott said, adding the real vote is with the millions of shoppers whose lives are improved by the Wal-Mart experience.
And that experience was the focal point of the week's media event, titled "Champion the Customer."
But "The Changing Face of Wal-Mart" might best describe the theme.
"One of the ways we are working to strengthen the customer experience is to broaden the appeal of our merchandise," Scott said. While the retailer will strive to meet the needs of its most loyal shopper with low price points, it will also strive for a broader appeal to a new audience it hopes to attract.
"We want to keep our most loyal customers coming to our stores for their everyday needs," the CEO said. "But we also want them to buy merchandise they may not typically pick up at Wal-Mart. And we want to attract new customers who may not typically shop at Wal-Mart."
In particular, the retailer is making a concerted effort to understand and appeal more to the tastes of women and more affluent consumers.
The retailer has already begun the process by broadening its merchandise offerings with the addition of fashion-forward products in many categories including gifts, home accents, tabletop, furniture, infant and youth decor and clothing.
In the new Plano, Texas, store, which Scott dubbed the company's "merchandise lab," the retailer has introduced about 3,000 unique items. In its first full month of operation, the store is 42% ahead of expectations.
And perhaps of similar importance — general merchandise is outselling consumables, "which is the exact trend we want to drive throughout our stores nationwide," Scott said. "Plano is teaching us a lot, and it will teach us much more about the future."
Lee noted the retailer is also making a special effort to understand and appeal more to the Hispanic community, an effort that has already proven successful. In the 1,300 Wal-Mart stores having a dominant Hispanic customer base, sales increased more than 9% in 2005. Hispanics, he said, have a greater affinity for Wal-Mart than any other identifiable segment of the United States.
"This is great news for our business," he said. "Hispanic consumers are projected to hold about 10% — or $1 trillion — of this country's buying power by 2010."
But the changes are not just about merchandise and prices; sustainable business practices also have considerable weight. Among them is commitment to sound environmental practices.
Scott promised there would be a lot more on the sustainability and merchandising fronts as the company undergoes change.
"What is going on at Wal-Mart these days cannot be denied," he said. "Wal-Mart is a company in transformation."
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