As holiday shopping begins, Wal-Mart and Target take cues from each other
Wal-Mart and Target are each taking a cue from the other this holiday season.
After years of emphasizing low prices, Wal-Mart Stores Inc. wants to up the ante, but it also wants to be known for top customer service. Target Corp., which has a better image in that regard, has stressed a focus on offering deals.
The shift underscores how traditional retailers have to perfect every aspect of their operations as shoppers who could easily shop online instead become more demanding about price, selection and service. With online leader Amazon.com cementing customers with its juggernaut Amazon Prime shipping service, retailers such as Target and Wal-Mart need to offer more exclusive merchandise.
Heading into the critical holiday shopping season, Wal-Mart has the momentum. The Bentonville, Ark.-based company raised its profit outlook in August after reporting its eighth consecutive quarterly increase in a key revenue measure. Target had cut its profit forecast as customer traffic fell for the first time in a year and a half during the second quarter. Its key revenue measure also fell.
“Wal-Mart has been benefiting from better service and for this holiday season, it should be a boon,” said Ken Perkins, president of research firm Retail Metrics. “I expect Wal-Mart will outpace Target. Target has a big price hurdle.”
Wal-Mart has been working to improve service in its stores, and its move to raise wages and increase training for hourly workers has helped.
For the end of the year, the world’s largest retailer plans to deploy “holiday helpers” stationed at the checkouts, who can direct customers to registers with shorter lines or even run back to the aisles to pick up an item someone forgot.
It’s adding staff to handle customers picking up online orders at the stores. During the holiday season, Wal-Mart sees five times as many same-day pickup orders compared to a normal week.
“We want to serve the customer as they want to be served,” Wal-Mart Chief Operating Officer Judith McKenna said.
Target also is focusing on making online ordering and pickups easier. Starting Nov. 1, it had 1,106 stores that will ship directly to online shoppers, double the previous number. That should speed up delivery, and Target will be able to fulfill more orders. Online shoppers also can pick up their orders at all of Target’s stores.
Wal-Mart promises to be even more aggressive on prices and to offer more consistent pricing, instead of short-term deals. For example, a Roku 32-inch HDTV that was priced at $125 last year during a Black Friday sale will have the same price all season this year. Skinny jeans that sold last year for around $9 are now $7.88.
Target, which has acknowledged that it failed to deliver on the second part of its “Expect More, Pay Less” slogan, says about 60% of its marketing message this holiday season will be about value, up about 20% from last year. The Minneapolis-based retailer is repeating some of last year’s promotions but also adding new ones aimed at getting shoppers to more areas of the store.
“Value is the No. 1 determiner of where a guest will shop,” said Rick Gomez, Target’s senior vice president of marketing.
Target is also extending its free shipping promotion by a week, waiving the shipping fee for all digital orders until Jan. 1.
Both Target and Wal-Mart are offering even more exclusive products.
Wal-Martis offering 400 exclusive toy items including what is already a hit — a Disney Princess Carriage priced at $398. It’s also adding thousands more items that will be available for store pickup.
Target is offering 1,800 new or exclusive toys, about 15% more than last year. Another exclusive is a 10-disc box set from Garth Brooks, which includes his new album and the 25th anniversary edition of “Friends in Low Places.” The set will be in Target stores Nov. 11, two weeks before the new album is available elsewhere.
Wal-Mart is also planning more product demonstrations, in departments from toys to food. And Santas who used to remain stationary will roam the stores for more customer interaction and selfies.
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