Welcome to the the Ivey HBA Retail Marketing Management blog. Retail marketing is an exciting, dynamic, important, and very visible aspect of the overall field of marketing. Throughout the year, students will be posting comments regarding contemporary retailing issues. Although this is intended to be used by Bus 4411 students, industry marketing professionals are also invited to join in if they like.

Sunday, January 25, 2009

Wal-Mart's New RVP: The Shopping Experience?

By: Lainey Shrom

Wal-Mart, which has been known as a leader in price and selection, is trying to build up the experience component of its RVP. These efforts have been marked by store layout renovations to 75 stores in 2008. Wal-Mart is making an attempt to integrate “experience” into its value proposition to customers, while still aggressively focusing on low prices and product selection. Conventional wisdom states that it is nearly impossible to excel in more than 1-2 dimensions, but Wal-Mart is once again, trying to launch itself into uncharted retail territory.

Given that Wal-Mart is the #1 retailer in the world, it is forced into a defensive position in the marketplace and must be constantly changing as other retailers are vying for pieces of its market share. Management is eager to capitalize on consumer trends for more personalized shopping experiences. With the intense competition for customer loyalty, Wal-Mart, like other retailers, is finding a way to satisfy customer demands for both low prices and a high-end shopping experience.

The store format redesign has been done to improve customer traffic and create more open space to enhance the customer experience. Insights into the customer shopping behaviour have lead to changing the location of the pharmacy to the front of the stores. I believe that the movement of the pharmacy is due to studies related to the “Lazy Consumer Effect”. I feel that other major adjustments have been a result of an assessment of the categories within Wal-Mart’s portfolio. Management has reduced the depth of products carried in certain categories (Eg. Arts and Crafts) and has increased the breadth within growing categories, such as electronics. As well, categories that had previously been in separate parts of the store are now grouped together as a cohesive unit (Eg. Bedding, Housewares and Furniture) to better reflect the way consumers shop and make decisions.

Wal-Mart has also created a designated area for its energy efficient technology. Though this is different to what Home Depot decided to do with its EcoOptions products, I feel that Wal-Mart will benefit from this strategy because customers will be able to find these products quickly (this enhances the shopping experience more than the ability to compare prices in the aisles).

The question that remains: How will customers respond to the store layout changes? From a strategic perspective, this appears to be a foolproof plan, but consumers are not necessarily receptive to change. Loyal Wal-Mart shoppers may be used to the old layout and become confused and frustrated with variations. This redesign must be accompanied with customer communications explaining the changes and how they will enhance the customer’s shopping experience.

What will Wal-Mart do next? Assuming this redesign is successful, management must determine the next big change for the company. My thoughts?
1) Continuing to building the grocery category to assert leadership position (It is currently the number one grocer in the US)
2) Investigating the possibility of mini-stores in urban areas to address consumer’s need for precision shopping (time-conscious consumers)


Wal-Mart Redesign Complete

Wal-Mart Updates its Look

Wal-Mart Ushers in New Era in Store Design and Layout

The Wal-Mart Weekly: Supercentre Changes Happening in My Area

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