Wal-Mart Targets Customer Loyalty

May 12, 2006 - 09:09

Wal-Mart is trying to grow its customers’ loyalty and convert shoppers who are not so devoted to the company.

Speaking late last month at the American Consumer Conference in New York, N.Y., John Fleming, Wal-Mart’s executive vice president and chief marketing officer, said the retailer has developed a plan to continue to meet the needs of its current customer base, while reacting to the needs of potentially new or not-so-loyal customers.

According to Fleming, Wal-Mart examined the shopping habits of more than 130 million U.S. customers to get a better understanding of how they shop at the chain’s stores. The company analyzed these customers and segmented them into three groups: loyalists, selectives and skeptics. Wal-Mart’s analysis of these shoppers shows:

  • Loyalists shop at Wal-Mart 55 times a year, do 77 percent of their grocery shopping there and shop in at least five different categories.
  • Selectives shop at Wal-Mart 26 times a year, do 28 percent of their grocery shopping there and shop in 2-4 different categories.
  • Skeptics shop at Wal-Mart five times a year. For these individuals, Wal-Mart is not their store of choice; they usually shop there on an urgent basis.

Fleming said the company has implemented a 5-point plan to convert the selectives and skeptics into loyalists and implementing these five points should “drive deeper loyalty” over the long term with the company’s customer base. The tenets of the 5-point plan are:

  • The company is leveraging its supply chain skills to reduce by 10 percent the prices of higher-priced organic goods shoppers were purchasing in other stores.
  • Wal-Mart is responding to the ever-changing demographics of shoppers. As their needs for different products change, the company wants to be sure it has the products they need in their new lifestyles.
  • The company wants to increase its appeal to the growing Hispanic market. The company has identified 350 of its stores that it believes can expand their offerings and the way they operate to attract a larger portion of the Hispanic market.
  • To appeal to more upscale shoppers, specifically women, Wal-Mart is developing a new store format that is faster, easier and more convenient to shop. Wal-Mart’s super center in Plano, Texas, is the first of these stores.
  • To attract younger shoppers, the company plans to further develop its eco-friendly policies. In 15 years, the company plans to only use renewable energy sources, create zero waste and sell products to help sustain and preserve the environment.

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