Wal-mart goes back for the future … more EDLPs

TakeAway:  Wal-Mart lost sight of what made it a retail giant: every day low prices.

In an attempt to reverse its US sales slump, the company is abandoning its recent focus on upscale shoppers to instead refocus on low prices.

In a crowded mass retail segment, differentiating with the lowest prices just might get Wal-Mart back on track.

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Excerpted from brandchannel, “Wal-Mart Tries to Find Its Way Back,” by Dale Buss, March 22, 2011

It’s one thing for a brand to recognize the error of its ways and attempt to return to what made people love it in the first place. But it’s quite another thing to complete the journey successfully.

Walmart, America’s largest retailer, is finding out that truth about branding these days. It is mired in its worst U.S. sales slump ever, kept there for now by the chain’s inability to return to its roots as a basic purveyor of value-priced merchandise after an ill-considered move upscale.

[According to] Bill Simon, Wal-Mart corporate’s new U.S.-stores chief … Walmart stores are returning to the Every Day Low Prices formula that traditionally powered its sales growth, and also restoring broader selection.

“I think we tried to stretch the brand a little too far,” Simon said.

In short, Walmart realized that its core customers… liked the feel of stores so full of attractively priced merchandise that it could barely be contained on the shelves. A couple of years ago, under Project Impact, Walmart had stripped selection and focused on a clean-store look in an effort to attract upscale shoppers. But that group proved a fickle lot.

Now, in a new advertising campaign breaking next month, Walmart will highlight its decades-old emphasis on low pricing by poking fun at competitors … who use the sort of “high-low” strategy it just abandoned. …

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For sale: Diamond ring … $1 million … free shipping (I think)

From Costco, of course … complementing their strategic thrust into wedding gear and services.

Move fast … only one in stock at this price.

In store service goes virtual … and, oh yeah, help yourself.

TakeAway: Digital bar code scanning is being utilized in stores to help customers learn more about the product, watch videos, price shop, and even help make an online purchase. 

Home Depot has taken to this strategy to provide another way for customers to get tips and help especially for those in the digital world often unwilling to ask for help but would rather just look it up or do it themselves.  

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Excerpted from Internet Retailer, “The Home Depot customers get a Quick Response from mobile bar codes” by Katie Deatsch, March 22, 2011

… Home Depot long emphasized its jovial sales staff that is eager to offer product information and tips in stores. Now the retailer is taking that help to the mobile realm.

… a series of ads incorporating QR, or Quick Response, two-dimensional bar codes that smartphone owners can scan using an app tied to a smartphone’s camera to access product ratings and reviews, how-to guides, product videos and a web page on which they can make a purchase.

… Shoppers …will be able to access information like product demos and instruction videos, relevant accessories, buying guides, project guides, and an option to purchase online. …

… Home Depot … will be able to track the scans via Scanbuy bar code system analytics to better gauge customers’ interests, view locations of scans and more…

“… customers already using mobile devices to assist in the purchasing process, and now Home Depot is embracing this technology to more closely connect our stores and customers to our digital content…”

Bar code scanning may lend itself to products such as home furnishings that can have many complex features and are often installed by do-it-yourselfers.

… enables shoppers to scan…codes on Ralph Morris products for more information about the line as well as to gain access to post-sale help such as information on how to install the Randolph Morris products.

Other retailers using bar code scanning to promote their brands. …Macy’s Inc. last month launched a QR bar code scanning marketing program …that lets in-store shoppers use a mobile device …to access videos about the designers and brands. …provide consumers with tips and information on the latest trends, and advice and inspiration from celebrity style icons via 30-second films delivered to a phone.

 

 

 

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A Subway stop on every corner …

The marketing principle: Ubiquitous distribution.  Coke wants to always be within arm’s reach of every person. That’s ubiquity.

Now, Subway wants to be in every nook & cranny – anywhere somebody might yearn for a sandwich.

Punch line:  It’s official: the Subway sandwich chain has surpassed McDonald’s Corp. as the world’s largest restaurant chain, in terms of units.

At the end of last year, Subway had 33,749 restaurants worldwide, compared to McDonald’s 32,737.

Subway just opened its 1,000th location in Asia, including its first in Vietnam.

There are almost 8,000 Subways in unusual locations. “The non-traditional is becoming traditional.”

Subway has achieved its rapid growth, in part, by opening outlets in non-traditional locations such as an automobile showroom in California, an appliance store in Brazil, a ferry terminal in Seattle, a riverboat in Germany, a zoo in Taiwan, a Goodwill store in South Carolina, a high school in Detroit and a church in Buffalo, New York.

“We’re continually looking at just about any opportunity for someone to buy a sandwich, wherever that might be. The closer we can get to the customer, the better.”

McDonald’s is still the leader when it comes to sales. The burger chain reported $24 billion in revenue last year.

Excerpted from WSJ,  Subway Runs Past McDonald’s Chain , March 8, 2011

PSA: “Weddings by Costco” … why not?

HomaFiles is a non-commercial site that doesn’t accept advertising and doesn’t endorse specific products.

But, if we did, you can bet that “Weddings by Costco” would be in our strike zone.

Costco has sold coffins for years … ‘bout time they fot into weddings.

Be sure to email to a friend who’s getting married …

Uh-oh … the recession hits Wal-Mart as consumers change their buying ways.

TakeAway: Wal-Mart, the world’s largest retailer, has had seven consecutive quarters of declining same-store sales. 

A variety of factors contributed to this, including new shopping habits, strong competitors and a loss of some “fill-in” trips.

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Excerpted from WSJ, “U.S. Sales At Wal-Mart Show Decline” By Stephanie Clifford, February 22, 2011

As the Christmas season approached, Wal-Mart Stores said it was fixing the problems in its United States division. It hired new executives, added merchandise that it had cut, and fought with Target and other competitors to provide the lowest prices over the holidays.

Company executives and analysts said consumers seemed to have changed their ways during the recession, and that has persisted into the sluggish recovery.

New shopping habits, like using less credit, relying more on month-to-month cash and buying in smaller packages, have hampered Wal-Mart’s ability to climb out of the sales slump. 

In addition, while consumers are still using Wal-Mart for big shopping trips, they are visiting drugstores and dollar stores for in-between purchases.

In the fourth quarter of 2010, the problems stemmed from several areas. Toy sales were down in American stores, though Wal-Mart had aggressively promoted prices and added back toys to its aisles. Apparel continued to be a problem. 

And in consumables — basics like toilet paper and soap — Wal-Mart said its prices and sizes were a problem for shoppers who continued to be on tight budgets.

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Keep your Bud, gimme a Walgreen's … huh?

TakeAway: Cheap beer is nothing new, but private label beer is not so common.

But now, Walgreens is introducing its line of Big Flats lager across 4,600 stores.

As if AmBev and MillerCoors didn’t have enough to worry about, there might be some more competition among those companies’ low-end offerings.

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Excerpted from brandchannel, “Walgreens Offers Private-Label Beer,” by Jennifer Sokolowsky, January 31, 2011

Drugstores are the place to go to get your cough drops and allergy tablets, and now they are the places to pick up another kind of medicine — the self-medicating kind found in alcoholic beverages.

Duane Reade is luring Brooklyn hipsters by offering high-end bottled beer and fresh beer on tap to go in Williamsburg.

Now Walgreens is going in a completely different direction: offering its own private-label beer at the low end of the price scale.

Quietly introduced in mid-December, Walgreens now offers Big Flats 1901 lager in more than 4,600 of the chain’s 7,655 locations, according to the Chicago Tribune. …

Big Flats 1901 may be labeled “premium brew,” but its price is anything but premium at about 50 cents a can, or $2.99 for a six-pack, though prices may vary by region. …

Walgreens is surely betting that those who come in looking for cheap beer will probably leave with something else as well — and that those who come in for something else just might not be able to resist leaving with some cheap beer. …

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Uniqlo’s Push to New Markets

TakeAway: Looking to become the world’s leading clothing retailer, Uniqlo plans to move into the fast-growing Indian and Brazilian markets and to vastly expand its presence in China, where the number of stores are intended to leapfrog those in Japan by 2020.

The retailer quickly is becoming a template for the rest of corporate Japan, faced with the twin obstacles of shrinking domestic demand and a dearth of Japanese leaders with the know-how and language skills needed to lead a push into global markets.

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Excerpted from WSJ, “Uniqlo Plans for a Global Push” By Mariko Sanchanta, December 20, 2010

Fast Retailing’s fashion focus, however, is different from its competitors (e.g. Zara and H&M): It sells casual, affordable basics, such as fleece jackets, jeans and its Heat Tech line of thermal underwear. "We don’t make clothes that you throw away after one season."

In its home market, where Fast Retailing derives the bulk of its revenue, the company has caused a buzz by breaking with many of the conventions of Japanese businesses. Fast has said English must be spoken at all business meetings where foreigners are present, that all email correspondence must be written in English by 2012 and that the number of its foreign employees will overtake Japanese workers by 2015.

"Our advantage is that we are a Japanese brand, which is known for good quality and design, and we are closer in proximity to the Asian countries."

"In China, we will grow organically without alliances or collaborations. There are no Chinese companies that can do a better job there than us. . . . We won’t be striving to increase our store count in Japan by that much going forward."

Uniqlo is forecast to have 844 stores in Japan and 76 in China by the end of August. By 2020, Uniqlo aims to have 1,000 stores in China through organic growth alone. Zara had 60 stores in China as of Oct. 31.

Analysts said that with more than 800 stores in Japan, the market is saturated and consumers are reining in their spending. "Overall purchase sizes [in Japan] have been going down, but Japanese consumers have been increasing the frequency of their visits to stores in some categories. People want to spend less on each visit," said Brian Salsberg, head of McKinsey & Co.’s retail-and-consumer group in Japan.

The company admits that it still has a lot to learn, particularly from rivals. "We can learn from H&M and Zara by looking at the speed with which they launch new stores. They are very courageous to open new stores, whether they succeed or not. We, in contrast, are very cautious with what we do," he said.

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Full Article:
http://online.wsj.com/article/SB10001424052748704368004576028453572446140.html

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Target Gets Fresh with Mommies

TakeAway: Target has been aggressively marketing its fresh food offerings this year in a major nationwide campaign, which includes direct mail, billboards, television, radio and vehicle wraps, among other elements.

The ads focus in part on the three daily meals that could be put together with a trip to the store, and the company hopes its efforts will resonate with mothers, who are a prime target of the campaign.

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Excerpted from NYTimes, “Shopping at Target?  Now You Can Pick Up a Dozen Eggs” By Tanzina Vega, December 16, 2010

While Target has carried snack foods like potato chips and soft drinks for years, the company has expanded to include fresh groceries like steak, chicken, eggs and apples. So far, 350 of the 1,752 Target stores nationwide have been reformatted to include the new food layout, and the company expects to add the arrangement to additional stores at the rate of about 400 a year.

While the fresh food offerings will include items similar to what a customer can find in a grocery store, “The concept is built around the notion of fill-in trips and convenience trips. There’s a real need for convenient and affordable grocery options.”

Target stocked fresh food items alongside local products like Turkey Hill ice cream, Ellio’s Pizza and Herr’s potato chips.

To market the concept, the company ran ads in local newspapers, used direct mail and placed door hangers on homes. It also used “guerrilla tactics,” like distributing 10,000 samples of produce on the streets of Philadelphia using branded bicycles and trucks with the Target bull’s-eye logo and “Get Fresh Philadelphia!” messages.

The look of the campaign incorporates Target’s bold red lettering against a white background with fruits and vegetables splashed across the layout.

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Full Article:
http://www.nytimes.com/2010/12/17/business/media/17adco.html?_r=2&ref=media

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Grocery stores learn some new tricks

TakeAway: The improved lighting in the produce section of your grocery store isn’t just for aesthetics.  

It’s part of a concerted effort by grocery stores to drive sales of healthier food that consumers say they want.

Studies indicate lighting alone can increase sales nearly 30%.  Expect these practices to become more widespread.

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Excerpted from NPR, “Nudging Grocery Shoppers Toward Healthy Food,” by April Fulton, November 8, 2010

Grocery stores are not necessarily designed to help customers choose the healthiest food. Signs and specials advertise chips and soda, and the coupons are usually for the pre-packaged, processed foods advertised by big brand-name companies with deep pockets. …

Some stores are getting wise to shoppers’ desires to eat better, as well as the challenges they face in doing so. Some are subtly shifting the focus to healthier products by using the same marketing tricks the large food companies and restaurants have used for years. …

Brian Wansink, the co-director of the Cornell Center for Behavioral Economics in Child Nutrition Programs, says grocery store sales goals are compatible with public health goals. …

He’s done a lot of research on produce and found that there are small things stores can do that will help them move a lot more volume of the healthy stuff.

Take product placement and soft, focused lighting, for example. Items that are highlighted in this way — even if they aren’t on sale — sell about 30 percent more, Wansink says. They just look more appealing than products under harsh, overhead fluorescent lights. …

… Smells can be used as an enticer, rather than just “fanning them out of the building,” as many stores do …

The danger with these marketing tools is in going overboard, bombarding people with public health messages about how they should eat better. If people feel persuaded, they will resist, Wansink says. Stores have got to make the shoppers feel like it’s their choice. …

 

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Full Article
http://www.npr.org/templates/story/story.php?storyId=131074210

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