For Sale: Fickle Shoppers’ Loyalty

For discount retailers, Colleen Aprati represents both their fondest dream and their worse nightmare.

The south Orange County resident has a household income of $110,000, but she is perfectly comfortable shopping in big, boxy stores with very few frills. Discounters would love to snag customers like her.

The problem is, how to keep them?

“I have no loyalty, no loyalty at all,” the 46-year-old stay-at-home mom said recently as she shopped at a Target in Foothill Ranch. Aprati said she could just as easily have been at Wal-Mart, or Kmart for that matter. “I go to all three,” she said.

As discounters and other retailers step up their battle for consumers, especially in lucrative markets such as Southern California, they’re finding that there are many shoppers like Aprati.

Egged on by a wobbly economy and growing options, consumers are insisting on low prices--especially for basic goods--reliable quality and a pleasant shopping experience. Yet discount shoppers appear to be particularly fickle. Analysts say they’ll often prowl anywhere for the best deal, and they’re willing to take the time to find it--switching from one store to another without batting an eye.

“There’s no such thing as loyalty anymore,” said Sarah Scheuer, spokeswoman for the National Retail Federation in Washington. “It could be any retailer who steps in and fills the void, if they have the right price, the right product and the right level of customer service--consistently.”

How to build or instill loyalty has become a major challenge for retailers as they expand and jockey for position. Kohl’s, considered a hybrid of a department and discount store, is expected to open at least 30 stores in Southern California next March; Target is putting up nearly a dozen more stores in the state; and Wal-Mart is building 3 million square feet of warehouse space in Southern California.

To attract and keep shoppers, retailers are trying to claim the lowest prices, increasingly offering jazzy brands and targeting specific consumers with ads and other promotions.

Target Stores Inc.’s attempts to lasso customers include a credit card program that allows customers to accumulate points as they use the co-branded Target Visa card, and receive a discount certificate when they reach a specific threshold of expenditures.

Price, of course, has always mattered to shoppers, a reality that pushed Wal-Mart Stores Inc. to a level of success so lofty that it’s now the world’s largest company. But recently, analysts say, consumers have become even more driven to find bargains as economic uncertainties made them more cautious and recession-driven markdowns trained them to seek out sales.

Kmart Corp., once the discount retail leader, has felt the wrath of demanding shoppers. The Michigan-based retailer, which filed for bankruptcy protection this year, saw many of its customers flee as its stores became shoddy and poorly stocked. Kmart is reorganizing by closing poorly performing stores and sprucing up its image.

Target has been the most aggressive to cater to the affluent consumer. The retailer says its typical shopper has a household income of $49,000, considerably higher than the average in the United States. Wal-Mart also is moving to attract more of the high-end market.

“I think people with money are feeling very smart about going to Sam’s Warehouse or Costco and filling up their BMW trunk with a case of tomato juice just to say, ‘Aren’t I smart?’” said Tom Holliday, president of Retail Advertising & Marketing Assn., a division of the National Retail Federation.

One strategy discounters are taking to build loyalty is through brands. Target, for example, has been marketing itself as the cool choice in discount shopping, partly by pairing with names like Mossimo, a youth-oriented Southern California clothing brand that is sold only at Target stores.

“People will be wearing a pair of zany warmup pants that cost $180, and they have on a $12 Mossimo shirt from Target,” Holliday said. “They don’t care if it all matches up in terms of all being expensive.”

Kari Reinhardt, 30, said her favorite store is Nordstrom, but she buys toys, snacks, cleaning supplies and lingerie from Target because it’s “kind of the cool store.”

“Ever since they introduced the [Mossimo] line, I buy clothes here,” said Reinhardt, who is the mother of twin 8-year-olds, Matthew and Brandon.

Although the Riverside homemaker is selective about discounters--she said Kmart seems like a place her grandmother would have shopped--Reinhardt is open to trying Kohl’s when it comes to town. She thinks she’ll like Kohl’s because it is sometimes compared to another store she frequents, Mervyn’s, a unit of Target.

“Mervyn’s, Target, Gap,” Reinhardt said, tugging at the silver belt, pink T-shirt and white shorts she was wearing, to reveal where each was purchased. “That would be right up my alley. Absolutely.”

Mission Viejo resident Pam Kennedy, 42, is another switch-hitter. The mom shopped recently at Target, where she took particular note of Waverly, a well-known brand of bedding. She said her last lawn chairs were the Martha Stewart brand, from Kmart.

“I’m going to run to Wal-Mart next for garden furniture,” she said.

To be sure, there are plenty of shoppers who stick determinedly to a favored store. Esther Heredia of Santa Ana loves her nearby Wal-Mart.

“This is my store,” said the 63-year-old grandmother of 12, who on a recent shopping trip had collected T-shirts, a diaper bag and pillowcases. “I like the prices. If I have a little extra [money], here I am.”

The growing Latino market has become a focal point for retailers trying to build loyalty in places such as Southern California. Kmart recently announced a radio advertising campaign to target the multicultural consumer.

The company said that nationally about one-third of its shoppers are Latinos and blacks. The ads, which will feature music by Jose Feliciano, among others, are intended to “build an emotional bond” with shoppers and “drive consumer loyalty,” the company said.

Wal-Mart, meanwhile, has continued to emphasize the basics: low prices and well-stocked shelves. The company uses timeworn techniques that reinforce a down-home feeling: Greeters are stationed at the door, and the store manager’s telephone number is printed on the receipt.

Wal-Mart probably will draw--and keep--more California shoppers in the future by opening Supercenters, a format that includes a full line of groceries.

“You’ll be looking at Supercenters coming to California and Southern California in late 2003 and coming full force in the years 2004 through 2007,” said Burt Flickenger, whose Connecticut consulting firm Reach Marketing works with discounters and their suppliers.

In rapidly growing Corona, where Kmart, Wal-Mart and Target all exist within a three-mile radius, residents bemoan the fact that a shuttered House2Home store couldn’t make it, and they eagerly await the opening of perhaps two Kohl’s stores in their city next year.

Christine Lessing, 53, who works from her home in Corona, said she’s ready to give Kohl’s a try.

“If another store would come, in the right price range, I think people would welcome it,” she said.

Another high-growth area that discounters are targeting is Fresno, where blistering competition turned the three Kmart stores there into losing propositions and caused that company to shutter the stores.

Fresno also has three Wal-Marts and four Target stores, two of which recently opened.

It’s a matter of the “survival of the fittest,” said Allison Larsen, a spokeswoman for the Fresno Economic Development Corp.