ANNUAL SHOPPER REVIEW: WALMART
Prepared by:
Robin Sherk
Senior Analyst
Rachel McGuire
Senior Analyst
October
2012
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 doubleedged. 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.
Source: Kantar Retail analysis
© Copyright 2012 Kantar Retail
2
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.
Source: Kantar Retail analysis
© Copyright 2012 Kantar Retail
3
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
© Copyright 2012 Kantar Retail
4
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:
• 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.
Source: Kantar Retail analysis
© Copyright 2012 Kantar Retail
5
Mass Channel Weekly Shoppers Have Declined
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.
Weekly Shoppers
52%
49%
50%
50%
48%
Supermarkets
50%
47%
44%
42%
40%
Convenience stores
40%
39%
38%
38%
37%
Mass channel
24%
21%
21%
19%
21%
Drug stores
16%
14%
15%
14%
16%
Value
discounters/dollar
stores
Warehouse clubs
9%
8%
9%
8%
7%
Fewer weekly shoppers across
channels indicates a broader
trend of shoppers spreading
their purchase needs across
stores, indicating decreased
allegiance to particular formats.
Weekly Shoppers, by Channel
2007–11
ppd
change
Warehouse clubs
-1.8
2007
Value discounters/dollar stores
-0.3
2008
Drug stores
-2.7
2009
Mass channel
-3.4
2010
2011
Source: Kantar Retail ShopperScape®, October 2007, 2008, 2009, 2010 and 2011
Convenience stores
Supermarkets
-10.0
-3.9
© Copyright 2012 Kantar Retail
6
Though Walmart’s Newer Formats Show Growth
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.
Percent Shopped Walmart (by format) during Past Four Weeks
80%
69%
70%
69%
68%
67%
64%
65%
11%
11%
60%
50%
40%
30%
20%
9%
8%
Walmart.com
May-12
Mar-12
Jan-12
Nov-11
Sep-11
May-11
Mar-11
Jan-11
Nov-10
Sep-10
Jul-10
May-10
Mar-10
Jan-10
Nov-09
Sep-09
Jul-09
May-09
Mar-09
Jan-09
Nov-08
Sep-08
Jul-08
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
Walmart/Walmart Supercenter
Jul-11
7%
0%
Jul-12
10%
10%
9%
9%
Walmart Neighborhood Market*
*Analysis for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of January 2011
Source: Kantar Retail ShopperScape® , January 2007- July 2012
© Copyright 2012 Kantar Retail
7
While the Families that It Attracts Evolves
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.
All Shoppers
<$25K
Annual HH
Income
Spanish Origin
Marital Status
Generation
Children in HH
Pet ownership
Market Size
$25K - $49.9K
$50K - $74.9K
$75K - $99.9K
$100K+
Yes
Now married
Never married
Divorced, widowed, separated
Generation Y (1982 to 2002)
Generation X (1965 to 1981)
Baby Boomers (1946 to 1964)
Seniors (before 1946)
Children under 19 at home
No children under 19 at home
Dog Owners
Cat Owners
Under 100,000
100,000 - 499,999
500,000 - 1,999,999
2,000,000 or more
Monthly Walmart/WMSC Shoppers
PPT Change
Q2 2012
Q2 2012
Q2 2011
Q2 2007
Q2 '12 vs.
Q2 '11
Q2 '12 vs.
Q2 '07
26%
25%
18%
11%
20%
12%
58%
21%
21%
14%
31%
38%
17%
26%
74%
41%
33%
13%
15%
21%
51%
28%
28%
18%
11%
15%
12%
59%
18%
22%
14%
31%
38%
17%
29%
71%
45%
35%
17%
19%
23%
41%
29%
28%
18%
11%
15%
12%
54%
21%
25%
15%
31%
37%
16%
27%
73%
45%
35%
18%
19%
24%
38%
30%
28%
18%
10%
13%
10%
58%
18%
23%
7%
32%
38%
22%
31%
69%
44%
36%
18%
20%
25%
37%
-0.2
-0.4
0.0
0.3
0.3
-0.3
5.0
-2.6
-2.4
-1.3
0.1
0.6
0.6
1.1
-1.1
-0.4
0.0
-1.0
0.3
-1.7
2.4
-2.1
Source: Kantar Retail ShopperScape® April, May and June of 2012, 2011 and 2007
-0.8
-0.6
0.8
2.6
1.2
1.2
0.1
-1.3
6.3
-0.8
-0.2
-5.3
-2.5
2.5
0.5
-1.7
-0.9
-0.7
-1.9
3.5
Note: Grey
highlighting on
indicates
statistically
significant diff
(95% CL).
© Copyright 2012 Kantar Retail
8
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
© Copyright 2012 Kantar Retail
9
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:
• 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.
Source: Kantar Retail analysis
© Copyright 2012 Kantar Retail
10
Financial Concerns Are Easing versus Last Year
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.
Household Financial Health of Walmart Shoppers
Job security
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Household Income level
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Credit card debt
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Monthly mortgage/car payments
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Worth of investments
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Value of home
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Source: Kantar Retail ShopperScape®, April–June 2011 and 2012
Q2 2011
Q2 2012
18%
62%
20%
19%
61%
21%
24%
48%
28%
28%
46%
26%
26%
56%
18%
25%
56%
18%
20%
67%
13%
21%
66%
13%
24%
53%
22%
21%
56%
23%
15%
56%
30%
18%
58%
24%
Note:
Shading
indicates
significant
year-to-year
difference
(90% CL)
© Copyright 2012 Kantar Retail
11
Though Shoppers Still Very Sensitive to Prices
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.
Awareness of Rising Food Prices,
by Where Most Spend on Groceries
(% say food prices have increased a lot/somewhat)
90%
88%
88%
Deal-Seeking
Strategies Using to Offset Rising Food Prices
85%
86%
84%
82%
80%
78%
78%
Limiting
84%
76%
72%
Total
Walmart Publix
Safeway
Trading
Down
74%
All
Shoppers
Walmart
Shoppers
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%
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%
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%
Note: Shading indicates significant difference between all shoppers and Walmart shoppers (90% CL)
Source: Kantar Retail ShopperScape®, November 2011
© Copyright 2012 Kantar Retail
12
Overall, Spending Plans Steadily Are Improving
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.
Note: No significant differences between all shoppers and
Walmart shoppers (90% confidence level)
Source: Kantar Retail ShopperScape®, January 2009–June 2012
© Copyright 2012 Kantar Retail
13
But One in Five Are Going to Walmart Less Often
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.
Among the 22% of
Walmart shoppers
who are shopping
Walmart less often
Shopping Frequency at
Walmart/Walmart Supercenter
Compared With Same Time Last Year
64%
22%
15%
More often
About the same
Less often
Reasons for Shopping Walmart / Walmart Supercenter Less Compared
With Last Year
Total
Annual HH Income
$25k <$25k
>$85K
$84.9K
50%
47%
45%
Shoppi ng l es s i n genera l
48%
Shoppi ng more a t s uperma rkets
24%
25%
23%
23%
Other retai l ers offer a more pl ea s a nt s hoppi ng experi ence
22%
15%
25%
22%
Shoppi ng retai l ers tha t a re conveni ent to home/work
21%
21%
23%
18%
Ca n fi nd better overa l l va l ue a t other retai l ers
20%
21%
25%
13%
Shoppi ng more a t retai l ers tha t a l l ow me to get i n/out qui ckl y
18%
17%
20%
17%
Shoppi ng more a t Ta rget
18%
9%
20%
26%
Di vi di ng s hoppi ng a mong more s tores , i ns tea d of one-s top s hoppi ng
14%
15%
18%
9%
Shoppi ng more a t dol l a r s tores
14%
21%
15%
5%
Other retai l ers ca rry more of the i tems I need
11%
9%
13%
11%
Shoppi ng more a t onl i ne-onl y retai l ers
9%
9%
9%
7%
Shoppi ng more a t wa rehous e cl ubs
9%
4%
12%
9%
Other
17%
17%
21%
11%
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.
Source: Kantar Retail ShopperScape® May 2012
© Copyright 2012 Kantar Retail
14
Walmart’s Shoppers Value Savings, One-Stop
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.
Arrows indicate significant difference between all shoppers vs. Walmart shoppers (90% confidence level)
Source: Kantar Retail ShopperScape®, January 2012
© Copyright 2012 Kantar Retail
15
Higher-Income Shoppers Appreciate the Deal
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
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 +
Source: Kantar Retail ShopperScape® , January 2012, Kantar Retail analysis
© Copyright 2012 Kantar Retail
16
Fewer Choosing Because of One-Stop Appeal
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.
Reasons for Store Choice for Groceries (Among Walmart Shoppers)
2007
2012
64%
56%
50%
49%
27%
18%
Conveniently located
EDLP
Able to one-stop shop
20%
19%
Betters sales and promotions
Note: arrows indicate significant difference between 2007 and 2012 (95% confidence level)
Reasons for Store Choice for HBC (Among Walmart Shoppers)
2007
62%
58%
53%
2012
50%
34%
29%
20%
Better value
Conveniently located
Able to one-stop shop
22%
Better sales or promotions
Note: arrows indicate significant difference between 2007 and 2012 (95% confidence level)
Source: Kantar Retail ShopperScape®, Feb/May/Aug 2007 and Feb/May/Aug 2012
© Copyright 2012 Kantar Retail
17
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
© Copyright 2012 Kantar Retail
18
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.
Source: Kantar Retail analysis
© Copyright 2012 Kantar Retail
19
Though Leveling Off, Trips Are Up since 2010
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.
Note: arrows indicate significant year-to-year difference (90% confidence level)
Source: Kantar Retail ShopperScape® , Feb/May/Aug/Nov 2010 and 2011, Feb/May/Aug 2012
© Copyright 2012 Kantar Retail
20
Trips Are Generally for Stock-Up Occasions
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.
Stock-up
Fill-in
Immediate use
Buy coupon items
Browsing
Special occasion
Buy sale items
Source: Kantar Retail ShopperScape®, May/Aug/Nov 2010, Feb/May/Aug/Nov 2011, Feb/May 2012
© Copyright 2012 Kantar Retail
21
The Basket Leans to Grocery, Consumables
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.
$95.60
$101.99
$88.30
Source: Kantar Retail ShopperScape® , Feb/May/Aug/Nov 2010 and 2011, Feb/May/Aug 2012
© Copyright 2012 Kantar Retail
22
Fresh Is the Dominate Department Shopped
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.
Many shoppers shop
relatively few categories
at Walmart,
underscoring its need to
encourage shoppers to
“cross the box” to
general merchandise
Source: Kantar Retail ShopperScape® , May 2009, May 2010, May 2011, and May 2012
© Copyright 2012 Kantar Retail
23
Cross Shopping Rises Starkly for Amazon
Underscoring the heightened competition from online, Amazon is now the #1
retailer where Walmart shoppers also shop.
Top 25 Retailers Cross-Shopped by Walmart Shoppers
Amazon.com
Target
Walgreens
CVS/pharmacy
Dollar Tree
Lowe's
The Home Depot
Kohl's
Dollar General
JCPenney
Kroger
Best Buy
eBay.com
Sam's Club
Family Dollar
Macy's
Kmart
Barnes & Noble
Bed Bath & Beyond
Staples
Sears
PetSmart
Michaels
Big Lots
Costco
Jan-Jul
2007
Jan-Jul
2012
PPD 2012
vs. 2007
24%
42%
38%
29%
n/a
32%
37%
25%
29%
33%
23%
27%
24%
24%
21%
19%
23%
21%
19%
19%
20%
16%
17%
22%
14%
45%
41%
39%
32%
32%
32%
31%
30%
30%
29%
24%
23%
22%
22%
21%
19%
19%
19%
17%
17%
17%
16%
16%
15%
15%
21.1
-1.2
1.4
3.2
n/a
-0.4
-5.6
4.6
0.8
-3.5
0.5
-4.7
-1.7
-2.6
0.4
0.5
-4.0
-1.7
-1.6
-1.7
-3.4
0.5
-1.0
-6.9
1.2
– More Walmart shoppers are now crossshopping Amazon.com and drug stores
• Kohl’s also is gaining traction
• Dollar channel holding steady
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.
– 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
Note: Bolding/grey highlight indicates a statistically significant PPD (95% C.L.)
Source: Kantar Retail ShopperScape® , January-July, 2007 and 2012
© Copyright 2012 Kantar Retail
24
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
© Copyright 2012 Kantar Retail
25
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:
• 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.
Source: Kantar Retail research and analysis
Walmart’s core principles
examined in this section:
© Copyright 2012 Kantar Retail
26
Walmart’s Price Leadership Faces Challenges
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.
The value offered by Walmart is better than it was
a year ago (% that agree/disagree)...
35%
31%
30%
25%
21%
26%
26%
25%
21%
24%
22%
20%
20%
Anticipate that
Walmart will continue
to ramp up its Ad
Match and “See for
yourself” local price
leadership messages
15%
15%
10%
5%
0%
Total
Gen Y
Strongly agree/agree
Gen X
Boomers
Seniors
Disagree/strongly disagree
*Among Walmart shoppers only
Note: Yellow arrows indicate significantly greater/lesser vs. total (95% confidence level)
Source: Kantar Retail ShopperScape®, May 2012
© Copyright 2012 Kantar Retail
27
But Shoppers Notice the Widened Assortment
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.
I have noticed more local products available at
my Walmart store
There is a broader assortment of items available
at Walmart now compared with a year ago
36%
35%
35%
30%
32%
30%
25%
25%
20%
20%
19%
28%
30%
28%
26%
25%
25%
21%
23%
20%
19%
15%
15%
10%
10%
5%
5%
0%
19%
20%
15%
28%
29%
28%
13%
0%
Total
Gen Y
Strongly agree/agree
Gen X
Boomers
Disagree/strongly disagree
Seniors
Total
Gen Y
Gen X
Strongly agree/agree
Boomers
Seniors
Disagree/strongly disagree
*Among Walmart shoppers only
*Among Walmart shoppers only
Note: Yellow arrows indicate significantly greater/lesser vs. total (95% confidence level)
Source: Kantar Retail ShopperScape®, May 2012
© Copyright 2012 Kantar Retail
28
Greater Attention to the Experience Needed Too
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.
I've noticed more items out of stock at
Walmart compared with a year ago
40%
35%
40%
37%
33%
32%
30%
25%
It is easier to shop Walmart now than
it was a year ago
33%
26%
24%
35%
24%
24%
26%
30%
26%
25%
25%
25%
23%
21%
21%
20%
20%
28%
27%
20%
16%
15%
15%
10%
10%
5%
5%
0%
15%
0%
Total
Gen Y
Strongly agree/agree
Gen X
Boomers
Disagree/strongly disagree
Seniors
Total
Gen Y
Strongly agree/agree
Gen X
Boomers
Seniors
Disagree/strongly disagree
Note: Yellow arrows indicate significantly greater/lesser vs. total (95% confidence level)
Source: Kantar Retail ShopperScape®, May 2012
© Copyright 2012 Kantar Retail
29
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
© Copyright 2012 Kantar Retail
30
Growth Platforms
Neighborhood Market and Walmart.com shoppers
Recognizing the growth of smaller formats and online shopping, Walmart is
advancing its grocery banner and eCommerce 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.
Source: Kantar Retail research, store visits, and analysis
© Copyright 2012 Kantar Retail
31
Neighborhood Market Penetration Is Growing
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.
12%
Percent Shopped Walmart Neighborhood Market during Past
Four Weeks
10%
8%
8%
7%
6%
4%
2%
0%
Walmart Neighborhood Market*
Overall trend
*Analysis for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of January 2011
Source: Kantar Retail ShopperScape® , January 2011 – July 2012, Kantar Retail analysis
© Copyright 2012 Kantar Retail
32
And the Shopper Base Is Slightly Different
Compared to the Supercenter, Neighborhood Market shoppers are
younger, more urban, and more likely to be of Hispanic origin.
Shopped Retailer in Past 4 Weeks
Walm art
Neighborhood
Supercenter
Market
Sample Size
<$25K
$25K - $49.9K
Annual
$50K - $74.9K
HH Incom e
$75K - $99.9K
$100K+
Non- MSA/ MSA <500K
Market
MSA 500K - 1,999K
Size
MSA 2M
Kids
Children under 19 at home
in HH
No children under 19 at home
Generation Y (1982 to 2002)
Generation X (1965 to 1981)
Generation
Baby Boomers (1946 to 1964)
Seniors (before 1946)
Mean age
Spanish
Yes
Origin
6863
29%
28%
17%
10%
15%
34%
32%
33%
28%
72%
15%
32%
36%
17%
48.3
785
30%
25%
17%
11%
18%
17%
38%
45%
29%
71%
21%
32%
30%
16%
45.5
15%
21%
Given that Walmart
traditionally does not
over-index with these
shoppers, Neighborhood
Market should help the
retailer widen its
audience base
Highlighting indicates significant difference b/t column percentages (95% C.L.)
*in states where Neighborhood Market was present as of January 2011
Source: Kantar Retail ShopperScape®, Jan-July 2012
© Copyright 2012 Kantar Retail
33
The Basket also Is Quite Lucrative
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.
$100.02
$90.52
Avg Trips
per Month:
5.2
Source: Kantar Retail ShopperScape® , Aug/Nov 2011 and Feb/May/Aug 2012
Note that the
presence of
general
merchandise
varies widely in
this format, with
some stores
offering
entertainment
and home areas
6.9
© Copyright 2012 Kantar Retail
34
Neighborhood Market Shares Its Shoppers with
a Wide Range of Retailers …
… suggesting that it serves as more of a complement vs. destination format
All Shoppers
Neighborhood
Market
Shoppers
Index vs. All
Shoppers
WALMART (no N. Market)
75%
78%
104
Walgreens
Target
Amazon.com
CVS/pharmacy
The Home Depot
JCPenney
Lowe's
Dollar General
Dollar Tree
Kohl's
Sam's Club
Best Buy
Family Dollar
Kroger
Macy's
Bed Bath & Beyond
Barnes & Noble
Office Depot
eBay.com
PetSmart
Old Navy
Publix
Kmart/Big Kmart
Michaels
42%
37%
43%
32%
29%
26%
33%
32%
26%
24%
23%
20%
22%
32%
17%
16%
18%
14%
20%
16%
12%
19%
14%
14%
59%
54%
51%
45%
44%
43%
42%
41%
39%
37%
34%
34%
34%
33%
32%
32%
31%
29%
28%
26%
25%
24%
24%
23%
140
148
117
140
152
162
128
127
150
153
152
167
157
104
191
202
172
201
136
164
214
123
169
170
Competitors that Neighborhood
Market particularly overlaps and
over-indexes with:
*in states where Neighborhood Market was present as of January 2011
Source: Kantar Retail ShopperScape®, Jan-July 2012, Kantar Retail analysis
© Copyright 2012 Kantar Retail
35
Two-Thirds of Walmart Shoppers Shop Online
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.
% Shopped/Purchased Online During the Past
Six Months
Shopping Frequency on Amazon.com and Walmart.com
Never
Less than once a month
Monthly
Weekly
(at any retailer)
7%
18%
19%
9%
80%
13%
70%
9%
63%
62%
20%
60%
20%
35%
52%
40%
33%
53%
50%
40%
34%
30%
49%
20%
38%
29%
28%
All Shoppers
Walmart Shoppers
10%
0%
Amazon.com
All Shoppers
Walmart Shoppers
Walmart.com
22% of Walmart shoppers are monthly
shoppers of Walmart.com, much lower than the
proportion that regularly shop Amazon.com!
Source: Kantar Retail ShopperScape®, July 2012, June 2011- August 2012
All Shoppers
Shopped online in past 6 months
Walmart Shoppers
Purchased online in past 6 months
Note: no statistically significant difference between all shoppers and
Walmart shoppers.
© Copyright 2012 Kantar Retail
36
Penetration on Walmart.com Is Steadily Rising
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.
– Unique trips to Walmart.com
continue to gain traction, rising
12.3% year-over-year.
• Comparatively, Target has
witnessed year-over-year
declines.
Channel Comparison:
Unique Daily Trips in Millions
300.0
253
250.0
208
231
228
205
200.0
148
150.0
100.0
87
walmart.com
61
2011_Q2
2011_Q3
98
88
87
86
59
target.com
53
52
2012_Q1
2012_Q2
amazon.com
50.0
-
– 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.
2011_Q4
Source: Compete, Inc. 2012, a Kantar Media Company in exclusive partnership with Kantar Retail
Channel Comparison:
Unique Daily Shoppers in Millions
100
90
80
70
60
50
40
30
20
10
-
93
78
72
53
49
47
37
92
85
81
39
56
50
walmart.com
35
35
target.com
amazon.com
2011_Q2
2011_Q3
2011_Q4
2012_Q1
2012_Q2
Source: Compete, Inc. 2012, a Kantar Media Company in exclusive partnership with Kantar Retail
Source: Compete, Kantar Retail analysis
© Copyright 2012 Kantar Retail
37
And Most Often Buy Apparel, Entertainment
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.
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
15%
Women's apparel
Women's shoes
Hardcover or paperback books
E-books
Beauty or skin care products
DVD or Blu-ray movies
Consumer electronics
Computer
Men's apparel
OTC or vitamins
Video games
Toys/dolls/games
Furniture
Tablet computer (e.g., iPad)
Infants/toddlers/kids apparel
Pet food and supplies
School/home office supplies
Prescription drugs
Men's shoes
Small housewares (e.g., glasses)
9%
13%
12%
9%
9%
5%
4%
6%
5%
4%
4%
3%
5%
4%
3%
0%
5%
16%
16%
16%
14%
13%
13%
12%
11%
10%
7%
8%
2%
2%
26%
20%
19%
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.
9%
9%
9%
9%
8%
8%
8%
8%
10%
15%
Source: Kantar Retail ShopperScape® July 2012, Kantar Retail analysis
20%
25%
30%
© Copyright 2012 Kantar Retail
38
Walmart.com’s Core Shopper Is Young Families
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 .
Relative to all Walmart shoppers,
Walmart.com shoppers are:
• Younger (25-34 yrs old)
• Have children in the
household
• Less likely to be Hispanic
Age
Kids
in HH
Race
Annual HH
Income
Market
Size
Spanish
Origin
Sample Size
18-24
25-34
35-44
45-54
55-64
65+
Children under 19 at home
No children under 19 at home
White
Black/African American
<$25K
$25K - $49.9K
$50K - $74.9K
$75K - $99.9K
$100K+
Non- MSA/ MSA <500K
MSA 500K - 1,999K
MSA 2M
Yes
No
All Walmart
Shoppers
Walmart.com
Shoppers
18257
6%
18%
19%
21%
18%
20%
28%
72%
79%
13%
27%
27%
18%
11%
17%
34%
23%
43%
12%
85%
2984
6%
21%
20%
23%
17%
13%
32%
68%
78%
14%
25%
28%
18%
11%
17%
34%
23%
43%
11%
87%
Highlighting indicates significant difference b/t column percentages (95% CL)
Source: Kantar Retail ShopperScape®, Jan-July 2012
© Copyright 2012 Kantar Retail
39
Its Biggest Online Competitor Is Amazon
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
Amazon.com
eBay.com
Target
Best Buy
JCPenney
Kohl's
The Home Depot
Lowe's
Barnes & Noble
Sears
Macy's
Kmart
Staples
Old Navy
Bed Bath & Beyond
Walgreens
Apple
Office Depot
Victoria's Secret
Newegg.com
CVS/pharmacy
Zappos.com
QVC TV/QVC.com
Sam's Club
GameStop
Jan-Jul
2007
Jan-Jul
2012
PPD 2012
vs. 2007
45%
43%
36%
30%
25%
15%
21%
16%
19%
17%
10%
15%
15%
12%
13%
9%
6%
14%
9%
n/a
6%
n/a
10%
10%
n/a
68%
40%
29%
24%
22%
20%
18%
18%
18%
16%
15%
14%
12%
12%
12%
11%
10%
9%
9%
8%
8%
8%
8%
7%
7%
23.1
-3.5
-6.9
-5.8
n/a
5.2
-3.2
1.3
-1.2
-0.5
4.3
-1.4
-2.8
-0.2
-0.8
2.8
3.8
-4.8
-0.3
n/a
1.6
n/a
-1.6
-2.6
n/a
Note: Bolding/grey highlight indicates a statistically significant PPD (95% C.L.)
– 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
Source: Kantar Retail ShopperScape® , January – July, 2012 and 2007, Kantar Retail analysis
© Copyright 2012 Kantar Retail
40
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
© Copyright 2012 Kantar Retail
41
Appendix
The following charts are appended in the associated Excel file on
KRIQ. Click here to download the Excel file.
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
Source: ShopperScape®, Kantar Retail analysis
© Copyright 2012 Kantar Retail
42
Robin Sherk
Senior Analyst
Robin.Sherk@kantarretail.com
245 First Street
Floor 10
Cambridge, MA
02142
T +1 212 896 8191
F +1 617 499 2723
www.KantarRetailiq.com
© Copyright 2012 Kantar Retail