ANNUAL SHOPPER REVIEW: WALMART

prudencecoatInternet and Web Development

Nov 18, 2013 (3 years and 8 months ago)

57 views

Prepared by:

ANNUAL SHOPPER REVIEW: WALMART

Robin Sherk

Senior Analyst

October

2012

Rachel McGuire

Senior Analyst

© Copyright 2012 Kantar Retail

Executive Summary: Walmart Annual Update

Walmart’s biggest formats are not driving shopper penetration growth.

Though
nearly two
-
thirds (65%) of primary household shoppers shop its core Supercenter and
Discount formats, there has been a continuous erosion in Walmart shopper
penetration since 2008. Moreover, one in five (22%) of Walmart’s current shoppers
report shopping at Walmart less often than last year. Many of these shoppers are
shopping less in general, reminding the retailer that a sizable portion of its audience
(approximately one in five) still feel that their financial situation is deteriorating. Others
shopping less at Walmart are shopping more at competitors, including other grocers,
Target, Dollar General, and Amazon.

Basket sizes are increasing, though emphasis of wide assortment is double
-
edged.
Walmart shoppers have noticed the broadened assortment this year.
Average basket sizes and trip frequency have risen since 2010, with grocery serving
as the primary trip driver. Conversion for general merchandise still lags. Given the
wider assortment, shoppers also feel that the in
-
store experience has weakened
recently as they report out
-
of
-
stocks and more difficulty shopping the box. Viewed
broadly, the retailer’s one
-
stop affirmations are in line with what its shoppers find
important relative to other factors, but this proposition is becoming less of a motive to
shop at Walmart over time.









2

Source: Kantar Retail analysis

© Copyright 2012 Kantar Retail

Executive Summary: Continued

Price leadership still needs support.
Despite Walmart’s intense marketing efforts
since early 2011, its shoppers tend to disagree about whether the value offered by
Walmart is improving. At the same time, its shoppers increasingly value receiving a
good deal in addition to seeking Walmart’s everyday low price (EDLP) proposition.


Shopper reach is steadily growing at Neighborhood Market.
The Neighborhood
Market shopper base is slightly different than other Walmart shoppers, skewing
younger, more urban, and Hispanic. The grocer also draws shoppers on a different
type of trip than does the supercenter, as it better serves quick, fill
-
in trips. Meeting
the needs of this distinct audience will gather increased attention as management
rapidly expands its store footprint.


Walmart.com has opportunity to reach Walmart shoppers.

Even though 45% of
Walmart shoppers also shop monthly at Amazon, only 22% of Walmart shoppers
shop monthly at Walmart.com. Moreover, Walmart’s website disproportionately
captures young families, a crucial audience for the retailer to maintain over time.


3

Source: Kantar Retail analysis

© Copyright 2012 Kantar Retail

Table of Contents


Shopper Penetration


Penetration by channel, banner


Penetration by demographics


Shopper Motivations


Financial concerns


Spending intentions


Reasons to shop less


Motives to visit


Shopping Behaviors


Trips, trip type, and baskets


Where else Walmart store shoppers shop


Brand Position


Perceived price leadership


Assortment and store of the community


Growth Platforms


Neighborhood Market


Online


Appendix


Category preference, change over time




4



© Copyright 2012 Kantar Retail

Shopper Penetration

Walmart US has 3,925 stores, the majority of which are supercenters or
discount stores. The total includes an increase of 224 Supercenter and
Discount store locations between early 2007 and the end of 2011. Given
the expanding footprint, Walmart’s shopper reach has evolved in recent
years:


5

Source: Kantar Retail analysis



However, Supercenter and Discount store weekly
shopper penetration has trended downward since
2007.


At the same time, Neighborhood Market and online
penetration is trending upward

underscoring the
growth in these emerging formats.


Walmart’s shopper base tends to be lower income,
rural, and suburban families, though it has made
gains with upper income shoppers and urban
dwellers in recent years.

© Copyright 2012 Kantar Retail

7%
16%
21%
37%
40%
48%
8%
14%
19%
38%
42%
50%
9%
15%
21%
38%
44%
50%
8%
14%
21%
39%
47%
49%
9%
16%
24%
40%
50%
52%
Warehouse clubs
Value
discounters/dollar
stores
Drug stores
Mass channel
Convenience stores
Supermarkets
Weekly Shoppers
2007
2008
2009
2010
2011
Mass Channel Weekly Shoppers Have Declined


6

Most core retail channels have witnessed a reduction in weekly shoppers
since 2007, though value discounters and drug stores are starting to rebound.
Meanwhile, mass merchandisers continue to wane.

Source: Kantar Retail
ShopperScape
®, October 2007, 2008, 2009, 2010 and 2011

Weekly Shoppers, by Channel
2007–11
ppd
change
Warehouse clubs
-1.8
Value discounters/dollar stores
-0.3
Drug stores
-2.7
Mass channel
-3.4
Convenience stores
-10.0
Supermarkets
-3.9
Fewer weekly shoppers across
channels indicates a broader
trend of shoppers spreading
their purchase needs across
stores, indicating decreased
allegiance to particular formats.

© Copyright 2012 Kantar Retail

Though Walmart’s Newer Formats Show Growth


7

While the shopper base at Walmart’s big boxes shrinks, its penetration is
growing at Neighborhood Market and Walmart.com. Given this trend, the
retailer is both shoring up its core and investing in these rising opportunities.

Source: Kantar Retail ShopperScape
®
, January 2007
-

July 2012

69%
69%
68%
67%
64%
65%
9%
9%
10%
9%
11%
11%
7%
8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Jan
-
07
Mar
-
07
May
-
07
Jul
-
07
Sep
-
07
Nov
-
07
Jan
-
08
Mar
-
08
May
-
08
Jul
-
08
Sep
-
08
Nov
-
08
Jan
-
09
Mar
-
09
May
-
09
Jul
-
09
Sep
-
09
Nov
-
09
Jan
-
10
Mar
-
10
May
-
10
Jul
-
10
Sep
-
10
Nov
-
10
Jan
-
11
Mar
-
11
May
-
11
Jul
-
11
Sep
-
11
Nov
-
11
Jan
-
12
Mar
-
12
May
-
12
Jul
-
12
Percent Shopped Walmart (by format) during Past Four Weeks
Walmart/Walmart Supercenter
Walmart.com
Walmart Neighborhood Market*
*Analysis
for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of January 2011
© Copyright 2012 Kantar Retail

All Shoppers
Monthly Walmart/WMSC Shoppers
PPT Change
Q2 2012
Q2 2012
Q2 2011
Q2 2007
Q2 '12 vs.
Q2 '11
Q2 '12 vs.
Q2 '07
<$25K
26%
28%
29%
30%
-0.2
-2.1
$25K - $49.9K
25%
28%
28%
28%
-0.4
-0.8
$50K - $74.9K
18%
18%
18%
18%
0.0
-0.6
$75K - $99.9K
11%
11%
11%
10%
0.3
0.8
$100K+
20%
15%
15%
13%
0.3
2.6
Spanish Origin
Yes
12%
12%
12%
10%
-0.3
1.2
Now married
58%
59%
54%
58%
5.0
1.2
Never married
21%
18%
21%
18%
-2.6
0.1
Divorced, widowed, separated
21%
22%
25%
23%
-2.4
-1.3
Generation Y (1982 to 2002)
14%
14%
15%
7%
-1.3
6.3
Generation X (1965 to 1981)
31%
31%
31%
32%
0.1
-0.8
Baby Boomers (1946 to 1964)
38%
38%
37%
38%
0.6
-0.2
Seniors (before 1946)
17%
17%
16%
22%
0.6
-5.3
Children under 19 at home
26%
29%
27%
31%
1.1
-2.5
No children under 19 at home
74%
71%
73%
69%
-1.1
2.5
Dog Owners
41%
45%
45%
44%
-0.4
0.5
Cat Owners
33%
35%
35%
36%
0.0
-1.7
Under 100,000
13%
17%
18%
18%
-1.0
-0.9
100,000 - 499,999
15%
19%
19%
20%
0.3
-0.7
500,000 - 1,999,999
21%
23%
24%
25%
-1.7
-1.9
2,000,000 or more
51%
41%
38%
37%
2.4
3.5
Marital Status
Generation
Children in HH
Pet ownership
Market Size
Annual HH
Income
While the Families that It Attracts Evolves


8

Traditionally, Walmart’s base has been lower income, rural families with
children. While the retailer still over
-
indexes with these groups, it also is
attracting more urban, younger, and higher income shoppers over time.

Source: Kantar Retail
ShopperScape
®
April, May and June of 2012, 2011 and 2007

Note: Grey
highlighting on
indicates
statistically
significant diff
(95% CL).

© Copyright 2012 Kantar Retail


Shopper Penetration


Penetration by channel, banner


Penetration by demographics


Shopper Motivations


Financial concerns


Spending intentions


Reasons to shop less


Motives to visit


Shopping Behaviors


Trips, trip type, and baskets


Where else Walmart store shoppers shop


Brand Position


Perceived price leadership


Assortment and store of the community


Growth Platforms


Neighborhood Market


Online


Appendix


Category preference, change over time




9

Table of Contents

© Copyright 2012 Kantar Retail

Shopper Motives

Given the eroding penetration at its core Supercenter and Discount
formats, understanding shoppers’ financial security and motives around
shopping Walmart is necessary to gain perspective on the issue:





10

Source: Kantar Retail analysis


Many Walmart shoppers feel that their financial
situation is improving and their spending intentions
are on par with others.


However, Walmart shoppers also are more
sensitive to price pressures, such as food inflation.
Of the Walmart shoppers shopping at the retailer
less often, they’re generally shopping less often
overall.



Motives for Walmart shoppers to shop at the
retailer involve low prices and the one
-
stop shop.
Over time, the one
-
stop shop is decreasing in
importance as shoppers increasingly want a deal.



© Copyright 2012 Kantar Retail

Financial Concerns Are Easing versus Last Year



Q2

2011

Q2

2012

Job security





Much
better/somewhat better off

18%

19%

No change from last year

62%

61%

Somewhat
worse/much worse off

20%

21%

Household

Income
level





Much
better/somewhat better off

24%

28%

No change from last year

48%

46%

Somewhat
worse/much worse off

28%

26%

Credit card debt





Much
better/somewhat better off

26%

25%

No change from last year

56%

56%

Somewhat
worse/much worse off

18%

18%

Monthly mortgage/car payments





Much
better/somewhat better off

20%

21%

No change from last year

67%

66%

Somewhat
worse/much worse off

13%

13%

Worth of investments





Much
better/somewhat better off

24%

21%

No change from last year

53%

56%

Somewhat
worse/much worse off

22%

23%

Value of home





Much
better/somewhat better off

15%

18%

No change from last year

56%

58%

Somewhat
worse/much worse off

30%

24%


11

Assessments of income and home value have improved since 2011, while
views of credit card debt, mortgage & car payments, and investments are
stable. However, a sizable group still says their situation is worsening.

Source: Kantar Retail ShopperScape
®
, April

June
2011 and 2012


Household Financial Health of Walmart Shoppers

Note:
Shading
indicates
significant
year
-
to
-
year
difference
(90% CL)

© Copyright 2012 Kantar Retail

Though Shoppers Still Very Sensitive to Prices

All
Shoppers

Walmart
Shoppers

Deal
-
Seeking

Using more coupons

49%

52%

Buying whatever brand is on sale

33%

35%

Planning

meals around what’s on sale

28%

30%

Buying whatever brand I have

a coupon for

22%

23%

Shopping around to “cherry

pick” best deals

18%

21%

Limiting

Not buying items that seem too expensive

46%

48%

Buying fewer items on impulse

45%

49%

Sticking to list

42%

45%

Buying more

products to cook from scratch

23%

24%

Buying fewer prepared

foods

19%

21%

Buying fewer

gourmet and specialty items

17%

19%

Trading
Down

Buying

more private brand

32%

36%

Buying less expensive

versions of products

27%

31%

Buying less

expensive cuts of meat

24%

27%

Buying

canned/frozen instead of fresh produce

12%

13%

None of these

12%

9%


12

Last year, Walmart shoppers were more likely than others to notice rising
food costs and take action. Looking to 2013, the base will likely respond
similarly to the food inflation expected as drought conditions affect prices.

Strategies Using to Offset Rising Food Prices

Source: Kantar Retail ShopperScape
®
, November 2011

Note: Shading indicates significant difference between all shoppers and Walmart shoppers (90% CL)

84%
88%
85%
78%
72%
74%
76%
78%
80%
82%
84%
86%
88%
90%
Total
Walmart
Publix
Safeway
Awareness of Rising Food Prices,
by Where Most Spend on Groceries
(% say food prices have increased a lot/somewhat)
© Copyright 2012 Kantar Retail

Overall, Spending Plans Steadily Are Improving


13

On par with all U.S. primary household shoppers, Walmart shoppers are
generally holding or increasing their near
-
term spending intentions versus
the same time last year.

Source: Kantar Retail ShopperScape
®
,
January 2009

June 2012


Note: No significant differences between all shoppers and
Walmart shoppers (90% confidence level)

© Copyright 2012 Kantar Retail

But One in Five Are Going to Walmart Less Often


14

About half of the shoppers going to Walmart less often are shopping less
overall. Many are going to supermarkets more often. Walmart also is losing
its higher income shoppers to Target, middle income shoppers to clubs, and
lower income shoppers to dollar stores.

Source: Kantar Retail
ShopperScape
® May 2012

Total
<$25k
$25k -
$84.9K
>$85K
Shoppi ng l ess i n general
48%
50%
47%
45%
Shoppi ng more at supermarkets
24%
25%
23%
23%
Other retai l ers offer a more pl easant shoppi ng experi ence
22%
15%
25%
22%
Shoppi ng retai l ers that are conveni ent to home/work
21%
21%
23%
18%
Can fi nd better overal l val ue at other retai l ers
20%
21%
25%
13%
Shoppi ng more at retai l ers that al l ow me to get i n/out qui ckl y
18%
17%
20%
17%
Shoppi ng more at Target
18%
9%
20%
26%
Di vi di ng shoppi ng among more stores, i nstead of one-stop shoppi ng
14%
15%
18%
9%
Shoppi ng more at dol l ar stores
14%
21%
15%
5%
Other retai l ers carry more of the i tems I need
11%
9%
13%
11%
Shoppi ng more at onl i ne-onl y retai l ers
9%
9%
9%
7%
Shoppi ng more at warehouse cl ubs
9%
4%
12%
9%
Other
17%
17%
21%
11%
Annual HH Income
NOTE: Grey shading indicates significantly greater percentage, compared with all shoppers shopping the retailer less;
border indicates significantly lower percentage (95% confidence level).
Read as: 45% of up-market shoppers who are shopping Walmart less often than last year are doing so because they are
shopping less in general.
Reasons for Shopping Walmart / Walmart Supercenter Less Compared
With Last Year
15%
64%
22%
More often
About the same
Less often
Shopping Frequency at
Walmart/Walmart Supercenter
Compared With Same Time Last Year
Among the 22% of
Walmart shoppers
who are shopping
Walmart less often

© Copyright 2012 Kantar Retail

Walmart’s Shoppers Value Savings, One
-
Stop


15

Relative to others, Walmart’s base is more focused on spending as little
money as possible and a one
-
stop shop. They are slightly less focused on
high
-
quality, though they equally appreciate “stress
-
free” shopping.

Source: Kantar Retail ShopperScape
®
, January 2012

Arrows indicate significant difference between all shoppers vs. Walmart shoppers (90% confidence level)

© Copyright 2012 Kantar Retail

Higher
-
Income Shoppers Appreciate the Deal


16

Walmart’s higher
-
income shoppers focus more on the experience: having
fun, finding new & high
-
quality items, and getting a deal. The lower income
focus more on employee interaction, a one
-
stop shop, and spending less.

Functional

Experiential

Source: Kantar Retail ShopperScape
®
, January 2012, Kantar Retail analysis

Notes
:

Boxes indicate significant difference between Haves and Have Nots (90% confidence level)


Definition of ‘Have Nots’: Annual household income of less than $65,000; ‘Haves’ is income $65,000 +

© Copyright 2012 Kantar Retail

64%
49%
27%
19%
56%
50%
18%
20%
Conveniently located
EDLP
Able to one
-
stop shop
Betters sales and promotions
Reasons for Store Choice for Groceries (Among Walmart Shoppers)
2007
2012
Note:
arrows indicate significant difference between 2007 and 2012 (95% confidence level)
62%
53%
34%
20%
58%
50%
29%
22%
Better value
Conveniently located
Able to one
-
stop shop
Better sales or promotions
Reasons for Store Choice for HBC (Among Walmart Shoppers)
2007
2012
Note:
arrows indicate significant difference between 2007 and 2012 (95% confidence level)
Fewer Choosing Because of One
-
Stop Appeal


17

Source: Kantar Retail
ShopperScape
®, Feb/May/Aug 2007 and Feb/May/Aug 2012


Compared with 2007, Walmart’s grocery/consumables shoppers are less
likely to chose Walmart because of its one
-
stop shop propositions. It’s now
less important than sales/promotions. Shoppers continue to value EDLP.

© Copyright 2012 Kantar Retail

Table of Contents


Shopper Penetration


Penetration by channel, banner


Penetration by demographics


Shopper Motivations


Financial concerns


Spending intentions


Reasons to shop less


Motives to visit


Shopping Behaviors


Trips, trip type, and baskets


Where else Walmart store shoppers shop


Brand Position


Perceived price leadership


Assortment and store of the community


Growth Platforms


Neighborhood Market


Online


Appendix


Category preference, change over time




18

© Copyright 2012 Kantar Retail

Trips, Basket, & Cross
-
Shopping

After experiencing decreased customer traffic in 2010, Walmart reinforced
its one
-
stop, low
-
price brand proposition in an effort to reverse this trend. At
the same time, its shoppers are generally starting to feel better about their
income and home values, helping to shore up near
-
term spending
confidence. In this environment, the trip to Walmart is evolving:


After trips bumped up in 2011, the frequency settled to channel norms in
2012. At the same time, average basket sizes have steadily increased.


The retailer continues to garner approximately as many trips for fill
-
in and
immediate use as it does stock
-
up occasions. Grocery continues to be the
primary trip driver.


Amazon has risen as a significant contender in recent years, becoming the
retailer most commonly cross
-
shopped by Walmart shoppers.








19

Source: Kantar Retail analysis

© Copyright 2012 Kantar Retail

Though Leveling Off, Trips Are Up since 2010


20

Source: Kantar Retail ShopperScape
®
, Feb/May/Aug/Nov 2010 and 2011, Feb/May/Aug 2012

Note: arrows indicate significant year
-
to
-
year difference (90% confidence level)

On par with the mass merchandiser & grocery channel averages, Walmart’s
shoppers visit the retailer approximately once a week. This indicates that
Walmart serves as a destination for shoppers fulfilling routine needs.

© Copyright 2012 Kantar Retail

Trips Are Generally for Stock
-
Up Occasions


21

Nearly 40% of the grocery and consumables trips to Walmart are for stocking
up. However, trips for fill
-
ins and immediate use also are very common:
combined they account for 42% of the occasions.

Source: Kantar Retail ShopperScape
®
, May/Aug/Nov 2010, Feb/May/Aug/Nov 2011, Feb/May 2012


Stock
-
up

Special occasion

Immediate use

Fill
-
in

Browsing

Buy coupon items

Buy sale items

© Copyright 2012 Kantar Retail

The Basket Leans to Grocery, Consumables


22

$88.30

$95.60

Source: Kantar Retail ShopperScape
®
, Feb/May/Aug/Nov 2010 and 2011, Feb/May/Aug 2012


$101.99

Walmart’s basket size continues to expand across grocery and general
merchandise.

Though most shoppers purchased food on their most recent
trip to Walmart, only 26% bought general merchandise

indicating
opportunity to increase shopper conversion across the box.

© Copyright 2012 Kantar Retail

Fresh Is the Dominate Department Shopped


23

Fresh food has risen to be the #1 department shopped at Walmart.
Meanwhile the other top 10 categories have seen eroding shopper
penetration since 2009.


Source: Kantar Retail ShopperScape
®
, May 2009, May 2010, May 2011, and May 2012

Many shoppers shop
relatively few categories
at Walmart,
underscoring its need to
encourage shoppers to
“cross the box” to
general merchandise

© Copyright 2012 Kantar Retail


More Walmart shoppers are now cross
-
shopping Amazon.com and drug stores


Kohl’s also is gaining traction


Dollar channel holding steady









Less cross
-
shopping of category
specialists (particularly The Home Depot
and Best Buy)



Less cross
-
shopping of Sam’s Club,
Kmart/Sears, Big Lots, and JCPenney

Cross Shopping Rises Starkly for Amazon


24

Source: Kantar Retail ShopperScape
®
, January
-
July, 2007 and 2012

Underscoring the heightened competition from online, Amazon is now the #1
retailer where Walmart shoppers also shop.

14% of Gen Y Walmart Moms are also members
of Amazon Mom, Amazon’s auto
-
replenishment
program targeted to mothers of infants and
toddlers. This underscores how today’s young
families shop differently than their parents did.

Top 25 Retailers Cross-Shopped by Walmart Shoppers
Jan-Jul
2007
Jan-Jul
2012
PPD 2012
vs. 2007
Amazon.com
24%
45%
21.1
Target
42%
41%
-1.2
Walgreens
38%
39%
1.4
CVS/pharmacy
29%
32%
3.2
Dollar Tree
n/a
32%
n/a
Lowe's
32%
32%
-0.4
The Home Depot
37%
31%
-5.6
Kohl's
25%
30%
4.6
Dollar General
29%
30%
0.8
JCPenney
33%
29%
-3.5
Kroger
23%
24%
0.5
Best Buy
27%
23%
-4.7
eBay.com
24%
22%
-1.7
Sam's Club
24%
22%
-2.6
Family Dollar
21%
21%
0.4
Macy's
19%
19%
0.5
Kmart
23%
19%
-4.0
Barnes & Noble
21%
19%
-1.7
Bed Bath & Beyond
19%
17%
-1.6
Staples
19%
17%
-1.7
Sears
20%
17%
-3.4
PetSmart
16%
16%
0.5
Michaels
17%
16%
-1.0
Big Lots
22%
15%
-6.9
Costco
14%
15%
1.2
Note: Bolding/grey highlight indicates a statistically significant PPD (95% C.L.)
© Copyright 2012 Kantar Retail

Table of Contents


Shopper Penetration


Penetration by channel, banner


Penetration by demographics


Shopper Motivations


Financial concerns


Spending intentions


Reasons to shop less


Motives to visit


Shopping Behaviors


Trips, trip type, and baskets


Where else Walmart store shoppers shop


Brand Position


Perceived price leadership


Assortment and store of the community


Growth Platforms


Neighborhood Market


Online


Appendix


Category preference, change over time




25

© Copyright 2012 Kantar Retail

Brand Position: Merchandise & Marketing


Walmart is known for carrying a broad, one
-
stop shopping offer at an
everyday low price to help shoppers “save money” and therefore “live
better.” In recent years, though, the retailer has faced challenges on both
of these fronts:


26

Source: Kantar Retail research and analysis


Assortment:
In 2009 and 2010, Walmart “rationalized” SKUs, cutting about 10% of
the items in its box. By 2011, the retailer recognized shoppers’ frustration and added
back the assortment by the end of the year. This year, Walmart has further focused
on the shopper by emphasizing local, “Store of the Community” products. While
shoppers have generally noticed the broadened assortment, they also see the
corresponding drawbacks (i.e., out of stocks).



Lowest prices:
Walmart has faced price leadership
challenges recently. In Kantar Retail’s semi
-
annual
pricing study, Target’s basket has been equal to or less
than Walmart’s basket in half of the assessments since
2009. Starting in 2011, and augmented in 2012,
Walmart has aggressively asserted its price position by
promoting Ad Match and “see for yourself” savings
messages and investing in gross margin to lower
prices. Today, its shoppers still disagree whether the
value that Walmart offers is improving.

Walmart’s core principles
examined in this section:

© Copyright 2012 Kantar Retail

Walmart’s Price Leadership Faces Challenges


27

More Walmart shoppers disagree that Walmart’s value has improved over
the past year than agree. Seniors are particularly skeptical, while more Gen
Y shoppers feel that the value is better.

Source: Kantar Retail
ShopperScape
®, May 2012

21%
31%
22%
20%
15%
25%
21%
26%
26%
24%
0%
5%
10%
15%
20%
25%
30%
35%
Total
Gen Y
Gen X
Boomers
Seniors
The value offered by Walmart is better than it was
a year ago (% that agree/disagree)...
Strongly agree/agree
Disagree/strongly disagree
*Among Walmart shoppers only

Anticipate that
Walmart will continue
to ramp up its Ad
Match and “See for
yourself” local price
leadership messages

Note: Yellow arrows indicate significantly greater/lesser vs. total (95% confidence level)

© Copyright 2012 Kantar Retail

20%
25%
23%
19%
13%
28%
28%
29%
28%
26%
0%
5%
10%
15%
20%
25%
30%
35%
Total
Gen Y
Gen X
Boomers
Seniors
I have noticed more local products available at
my Walmart store
Strongly agree/agree
Disagree/strongly disagree
30%
36%
32%
28%
25%
19%
15%
20%
21%
19%
0%
5%
10%
15%
20%
25%
30%
35%
Total
Gen Y
Gen X
Boomers
Seniors
There is a broader assortment of items available
at Walmart now compared with a year ago
Strongly agree/agree
Disagree/strongly disagree
But Shoppers Notice the Widened Assortment


28

Source: Kantar Retail
ShopperScape
®, May 2012

Nearly one in three shoppers noticed the broadened assortment, with Gen Y
and Gen X shoppers particularly attentive. However, only one in five noticed
more local items, suggesting opportunity to further assert Store of the
Community.

*Among Walmart shoppers only

*Among Walmart shoppers only

Note: Yellow arrows indicate significantly greater/lesser vs. total (95% confidence level)

© Copyright 2012 Kantar Retail

32%
37%
33%
33%
24%
24%
16%
26%
24%
26%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Total
Gen Y
Gen X
Boomers
Seniors
I've noticed more items out of stock at
Walmart compared with a year ago
Strongly agree/agree
Disagree/strongly disagree
Greater Attention to the Experience Needed Too


29

With the broadened assortment, about one
-
third of shoppers also are
noticing more out
-
of
-
stocks. More than one in four shoppers also feel that
the ease of shopping at Walmart has declined.

20%
25%
21%
21%
15%
26%
27%
28%
25%
23%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Total
Gen Y
Gen X
Boomers
Seniors
It is easier to shop Walmart now than
it was a year ago
Strongly agree/agree
Disagree/strongly disagree
Source: Kantar Retail
ShopperScape
®, May 2012

Note: Yellow arrows indicate significantly greater/lesser vs. total (95% confidence level)

© Copyright 2012 Kantar Retail

Table of Contents


Shopper Penetration


Penetration by channel, banner


Penetration by demographics


Shopper Motivations


Financial concerns


Spending intentions


Reasons to shop less


Motives to visit


Shopping Behaviors


Trips, trip type, and baskets


Where else Walmart store shoppers shop


Brand Position


Perceived price leadership


Assortment and store of the community


Growth Platforms


Neighborhood Market


Online


Appendix


Category preference, change over time




30

© Copyright 2012 Kantar Retail

Growth Platforms


Neighborhood Market:

In October 2011, Walmart announced that it
was ready to roll out this format, increasing its store base by about 50%
in 2012. This announcement came as the banner posted ~5%
comparable store sales growth and customer traffic gains, and reached
the returns that Walmart demands. From a shopper insights
perspective, the format has rising penetration and a distinct shopper
profile: more urban, younger, and Hispanic.



Walmart.com:
In April 2012, Walmart asserted that one of its corporate
strategies is “winning in global eCommerce.” Its recently created
@WalmarLabs division has focused on improving Walmart.com’s
platform in 2012 by introducing a new product search engine, called
Polaris, and advancing the website’s pricing position and search engine
optimization. Though Walmart shoppers shop online and
Walmart.com’s penetration is steadily growing, the website has
opportunity to develop its reach among Walmart shoppers.


31

Neighborhood Market and Walmart.com shoppers

Source: Kantar Retail research, store visits, and analysis

Recognizing the growth of smaller formats and online shopping, Walmart is
advancing its grocery banner and eCommerce platforms:

© Copyright 2012 Kantar Retail

Neighborhood Market Penetration Is Growing


32

Source: Kantar Retail ShopperScape
®
, January 2011


July 2012, Kantar Retail analysis

With a footprint in about one
-
third of states, this format is steadily increasing
its shopper reach with a 1 percentage point gain in July, year over year. This
coincides with the retailer’s reported ~5% comparable store sales gains in
mid 2012, well above Walmart US’s average.

7%
8%
0%
2%
4%
6%
8%
10%
12%
Percent Shopped Walmart Neighborhood Market during Past
Four Weeks
Walmart Neighborhood Market*
Overall trend
*Analysis
for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of January 2011
© Copyright 2012 Kantar Retail

And the Shopper Base Is Slightly Different


33

*in states where Neighborhood Market was present as of January 2011

Source: Kantar Retail
ShopperScape
®, Jan
-
July 2012

Compared to the Supercenter, Neighborhood Market shoppers are
younger,
more urban,
and more likely to be of Hispanic origin.

Given that Walmart
traditionally does not
over
-
index with these
shoppers, Neighborhood
Market should help the
retailer widen its
audience base

Sample Size
6863
785
<$25K
29%
30%
$25K - $49.9K
28%
25%
$50K - $74.9K
17%
17%
$75K - $99.9K
10%
11%
$100K+
15%
18%
Non- MSA/ MSA <500K
34%
17%
MSA 500K - 1,999K
32%
38%
MSA 2M
33%
45%
Children under 19 at home
28%
29%
No children under 19 at home
72%
71%
Generation Y (1982 to 2002)
15%
21%
Generation X (1965 to 1981)
32%
32%
Baby Boomers (1946 to 1964)
36%
30%
Seniors (before 1946)
17%
16%
Mean age
48.3
45.5
Spanish
Origin
Yes
15%
21%
Highlighting indicates significant difference b/t column percentages (95% C.L.)
Generation
Kids
in HH
Market
Size
Annual
HH Income
Shopped Retailer in Past 4 Weeks
Walmart
Supercenter
Neighborhood
Market
© Copyright 2012 Kantar Retail

The Basket also Is Quite Lucrative


34

$100.02

$90.52

Avg

Trips
per Month:

5.2

6.9

Source: Kantar Retail ShopperScape
®
, Aug/Nov 2011 and Feb/May/Aug 2012

The average Neighborhood Market basket is only about 10% less than the
Supercenter basket, and the trip frequency reaches 1

2 times a week. The
spend on general merchandise is fairly similar across formats.

Note that the
presence of
general
merchandise
varies widely in
this format, with
some stores
offering
entertainment
and home areas

© Copyright 2012 Kantar Retail

Neighborhood Market Shares Its Shoppers with
a Wide Range of Retailers …


35

*in states where Neighborhood Market was present as of January 2011

Source: Kantar Retail
ShopperScape
®, Jan
-
July 2012, Kantar Retail analysis

All Shoppers
Neighborhood
Market
Shoppers
Index vs. All
Shoppers
WALMART (no N. Market)
75%
78%
104
Walgreens
42%
59%
140
Target
37%
54%
148
Amazon.com
43%
51%
117
CVS/pharmacy
32%
45%
140
The Home Depot
29%
44%
152
JCPenney
26%
43%
162
Lowe's
33%
42%
128
Dollar General
32%
41%
127
Dollar Tree
26%
39%
150
Kohl's
24%
37%
153
Sam's Club
23%
34%
152
Best Buy
20%
34%
167
Family Dollar
22%
34%
157
Kroger
32%
33%
104
Macy's
17%
32%
191
Bed Bath & Beyond
16%
32%
202
Barnes & Noble
18%
31%
172
Office Depot
14%
29%
201
eBay.com
20%
28%
136
PetSmart
16%
26%
164
Old Navy
12%
25%
214
Publix
19%
24%
123
Kmart/Big Kmart
14%
24%
169
Michaels
14%
23%
170

Competitors that Neighborhood
Market particularly overlaps and
over
-
indexes with
:





… suggesting that it serves as more of a complement vs. destination format


© Copyright 2012 Kantar Retail

62%
63%
52%
53%
0%
10%
20%
30%
40%
50%
60%
70%
80%
All Shoppers
Walmart Shoppers
% Shopped/Purchased Online During the Past
Six Months
(at any retailer)
Shopped online in past 6 months
Purchased online in past 6 months
Two
-
Thirds of Walmart Shoppers Shop Online


36

Walmart shoppers are equally as likely to report shopping and purchasing
online as others. However, most are not frequenting Walmart.com to do so,
indicating opportunity to connect the in
-
store and online experience.

Source: Kantar Retail
ShopperScape
®, July 2012, June 2011
-

August 2012

Note: no statistically significant difference between all shoppers and
Walmart shoppers.

29%
28%
49%
38%
33%
34%
35%
40%
20%
20%
9%
13%
18%
19%
7%
9%
All Shoppers
Walmart Shoppers
All Shoppers
Walmart Shoppers
Amazon.com
Walmart.com
Shopping Frequency on Amazon.com and Walmart.com
Never
Less than once a month
Monthly
Weekly
22% of Walmart shoppers are monthly
shoppers of Walmart.com, much lower than the
proportion that regularly shop Amazon.com!

© Copyright 2012 Kantar Retail

Penetration on Walmart.com Is Steadily Rising


Unique trips to Walmart.com
continue to gain traction, rising
12.3% year
-
over
-
year.


Comparatively, Target has
witnessed year
-
over
-
year
declines.



Furthermore, Walmart.com’s
unique shopper counts
increased at a faster pace,
growing 19.6% year over year.


Walmart’s lead over Target is
becoming more pronounced,
while Amazon is holding its
lead over Walmart.


37

Though Walmart.com is the #1 most frequently shopped website among those
operated by brick & mortar retailers, Amazon captures more than double the
unique visits and nearly two
-
thirds more shoppers than Walmart.com.

87
86
148
88
98
59
61
87
53
52
208
205
253
228
231
-
50.0
100.0
150.0
200.0
250.0
300.0
2011_Q2
2011_Q3
2011_Q4
2012_Q1
2012_Q2
Channel Comparison:
Unique Daily Trips in Millions
walmart.com
target.com
amazon.com
Source: Compete, Inc. 2012, a Kantar Media Company in exclusive partnership with Kantar Retail
47
49
72
50
56
37
39
53
35
35
78
81
93
85
92
-
10
20
30
40
50
60
70
80
90
100
2011_Q2
2011_Q3
2011_Q4
2012_Q1
2012_Q2
Channel Comparison:
Unique Daily Shoppers in Millions
walmart.com
target.com
amazon.com
Source: Compete, Inc. 2012, a Kantar Media Company in exclusive partnership with Kantar Retail
Source: Compete, Kantar Retail analysis

© Copyright 2012 Kantar Retail

8%
8%
8%
8%
9%
9%
9%
9%
10%
11%
12%
13%
13%
14%
16%
16%
16%
19%
20%
26%
3%
4%
5%
3%
4%
4%
2%
2%
5%
6%
8%
7%
4%
5%
9%
9%
12%
13%
9%
15%
0%
5%
10%
15%
20%
25%
30%
Small housewares (e.g., glasses)
Men's shoes
Prescription drugs
School/home office supplies
Pet food and supplies
Infants/toddlers/kids apparel
Tablet computer (e.g., iPad)
Furniture
Toys/dolls/games
Video games
OTC or vitamins
Men's apparel
Computer
Consumer electronics
DVD or Blu
-
ray movies
Beauty or skin care products
E
-
books
Hardcover or paperback books
Women's shoes
Women's apparel
Top 20 Products Shopped for and Purchased Online During
Past Six Months
(among Walmart shoppers, at any online retailer)
Purchased Product Online
Shopped for product online
And Most Often Buy Apparel, Entertainment



38

Source: Kantar Retail ShopperScape
®
July 2012, Kantar Retail analysis

Though, Walmart’s shoppers also shop for less expected categories online,
including beauty, OTC, toys, and pet food. Over time, Kantar Retail expects
more of these categories to be purchased online.

Whether or not your
categories are widely
purchased online, it evolves
the store’s trip
-
drivers:
Consider which of your
category's co
-
purchased items
are moving online faster,
anticipating how this will affect
in
-
store navigation and your
promotions.

© Copyright 2012 Kantar Retail

Walmart.com’s Core Shopper Is Young Families


39

Source: Kantar Retail
ShopperScape
®, Jan
-
July 2012

All Walmart
Shoppers
Walmart.com
Shoppers
Sample Size
18257
2984
18-24
6%
6%
25-34
18%
21%
35-44
19%
20%
45-54
21%
23%
55-64
18%
17%
65+
20%
13%
Children under 19 at home
28%
32%
No children under 19 at home
72%
68%
White
79%
78%
Black/African American
13%
14%
<$25K
27%
25%
$25K - $49.9K
27%
28%
$50K - $74.9K
18%
18%
$75K - $99.9K
11%
11%
$100K+
17%
17%
Non- MSA/ MSA <500K
34%
34%
MSA 500K - 1,999K
23%
23%
MSA 2M
43%
43%
Yes
12%
11%
No
85%
87%
Highlighting indicates significant difference b/t column percentages (95% CL)
Spanish
Origin
Market
Size
Annual HH
Income
Kids
in HH
Age
Race

Relative to all Walmart shoppers,
Walmart.com shoppers are:



Younger (25
-
34 yrs old)


Have children in the
household


Less likely to be Hispanic



Walmart.com shoppers tend to be younger and are more likely to have
children at home than other Walmart shoppers, making them a desirable
demographic .


© Copyright 2012 Kantar Retail


Walmart.com cross
-
shopping
down from 2007:


Target.com


Category specialists (Best
Buy & office supply)



Walmart.com cross
-
shopping
up from 2007:


Amazon.com


Department stores (Macy’s,
Kohl’s)


Drug stores


Apple

Its Biggest Online Competitor Is Amazon


40

Source: Kantar Retail
ShopperScape
®
, January


July, 2012 and 2007, Kantar Retail analysis

More than two
-
thirds of Walmart.com shoppers also shop Amazon. As this is
more than twice the proportion that also shop Target.com, Amazon has
become the primary online contender for Walmart shoppers.

Top 25 Retailers Cross-Shopped Online by
Walmart.com Shoppers
Jan-Jul
2007
Jan-Jul
2012
PPD 2012
vs. 2007
Amazon.com
45%
68%
23.1
eBay.com
43%
40%
-3.5
Target
36%
29%
-6.9
Best Buy
30%
24%
-5.8
JCPenney
25%
22%
n/a
Kohl's
15%
20%
5.2
The Home Depot
21%
18%
-3.2
Lowe's
16%
18%
1.3
Barnes & Noble
19%
18%
-1.2
Sears
17%
16%
-0.5
Macy's
10%
15%
4.3
Kmart
15%
14%
-1.4
Staples
15%
12%
-2.8
Old Navy
12%
12%
-0.2
Bed Bath & Beyond
13%
12%
-0.8
Walgreens
9%
11%
2.8
Apple
6%
10%
3.8
Office Depot
14%
9%
-4.8
Victoria's Secret
9%
9%
-0.3
Newegg.com
n/a
8%
n/a
CVS/pharmacy
6%
8%
1.6
Zappos.com
n/a
8%
n/a
QVC TV/QVC.com
10%
8%
-1.6
Sam's Club
10%
7%
-2.6
GameStop
n/a
7%
n/a
Note: Bolding/grey highlight indicates a statistically significant PPD (95% C.L.)
© Copyright 2012 Kantar Retail

Table of Contents


Shopper Penetration


Penetration by channel, banner


Penetration by demographics


Shopper Motivations


Financial concerns


Spending intentions


Reasons to shop less


Motives to visit


Shopping Behaviors


Trips, trip type, and baskets


Where else Walmart store shoppers shop


Brand Position


Perceived price leadership


Assortment and store of the community


Growth Platforms


Neighborhood Market


Online


Appendix


Category preference, change over time




41

© Copyright 2012 Kantar Retail

Appendix

Demographic Profiles by Department Shopped:


Shopper Profiles:


Shoppers Who Indicate Walmart U.S. Is Store of Preference for
Grocery/HBC


Shopper Profiles:


Shoppers Who Indicate Walmart U.S. Is Store of Preference for
General Merchandise

Penetration by Department/Category:


Did Most Past Month Spending on
Grocery

at Walmart


Did Most Past Month Spending on
Health and Beauty Care
at Walmart


Did Most Past Month Spending on
Electronics and Entertainment
at Walmart


Did Most Past Month Spending on
Apparel, Shoes and Accessories
at Walmart


Did Most Past Month Spending on
Home Improvement Products
at Walmart


42

The following charts are appended in the associated Excel file on
KRIQ.
Click here to download the Excel file
.



Source:
ShopperScape
®, Kantar Retail analysis

© Copyright 2012 Kantar Retail

245 First Street

Floor 10

Cambridge, MA

02142

F +1 617 499 2723

www.KantarRetailiq.com

Robin Sherk

T +1 212 896 8191

Senior Analyst

Robin.Sherk@kantarretail.com