Remaking Wal-Mart
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Wal-Mart in the Waterworks Mall has wider aisles and lower shelf areas in the lanes as part of a new layout.
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Funny thing about customers. Wal-Mart Stores Inc. not long ago discovered many of its paying clientele -- a female-dominated group that has spent billions at its stores and helped it become the world's largest retailer -- didn't like some of its most distinctive features.
In surveys, customers said they found the big blue and gray exteriors of the Bentonville, Ark., retailer's stores and its logo "kind of cold and industrial looking," said Kate Mora, market manager for 12 Wal-Mart stores in Allegheny, Butler, Lawrence, Beaver and Washington counties. In general, they wanted the places to be faster, friendlier and cleaner.
Company management is working on it. For 12 weeks this fall, staff and customers at the store in the Waterworks shopping center along Freeport Road lived through an overhaul that ripped up tiles, changed lighting, moved around departments and brought a new earthtone-colored exterior to the operation.
There's more to come to Wal-Mart stores near most Americans. Slowly, steadily, the huge retailer is buffing up the no-frills warehouse look. In a strategy labeled "Project Impact," management hopes to remodel most of the 3,500-plus stores in the United States by early 2014.
About 540 stores will be done by year-end, including the four completed this year in Western Pennsylvania, according to a corporate spokeswoman. In addition to the Waterworks store, the new design has been installed in Mount Pleasant, North Versailles and Monaca sites. Some pieces may be seen in other stores that were remodeled earlier while the retailer tested various elements.
In a second-quarter earnings discussion, Vice Chairman Eduardo Castro-Wright said improvements in customer experience after the remodel are growing at twice the rate of the rest of the chain. He also said the changes seem to be helping attract new customers. Last week, management reported "Project Impact" stores had produced stronger sales with better profit margins and less inventory than nonremodeled stores.
Industry observers think Wal-Mart's push to broaden its appeal to more shoppers came at the right time. The project launched as the recession hit, just when people who might have thought the stores were dreary or didn't think the clothes as stylish as Target's were inclined to give it a chance again because of its value reputation.
"Not only will the retailer prevail during these tough economic times, but it will come out ahead by retaining some newly earned shoppers when the economy picks up," said Sandra J. Skrovan, senior vice president of Columbus, Ohio, consulting and research group Retail Forward, in a report issued this summer.
The company last week reported that nearly two-thirds of new customers gained during the downturn have returned to shop again, with new households accounting for 15 percent of store traffic in the August to September period.
The retailer is determined to take market share from its competitors. "Hands down, this whole initiative was driven by the fear that Target had the upper hand on them in terms of customer service," said Lynn Gonsior, executive vice president and chief marketing officer of Interbrand Design Forum in Dayton, Ohio.
She said Wal-Mart's new brighter stores with wide, open aisles are better organized -- pharmacy items are near the food section, for example, making it easier for people shopping for consumable goods -- and better signs combined with lower shelving have made it simpler to find things.
Those changes alone make the stores more user-friendly, she said.
The company still needs to work on customer service issues such as having staff in key places to answer questions, in Ms. Gonsior's opinion. RetailForward's research showed shoppers still perceive the retailer lagging competitors in terms of customer service.
"Wal-Mart recognizes that it probably is not economically feasible ... to outfit more than 3,500 stores with trained specialists to address shopper issues," said Ms. Skrovan in her report. Instead, she said Project Impact stores use more signs and "try me" displays as well as an in-store TV network to offer product information at key moments.
That's especially important in the entertainment department. Many see Best Buy -- now that Circuit City is gone -- as a prime target. At the Waterworks store, the change almost doubled the space devoted to televisions and high-tech entertainment products. Customers who walk in the front door have a clear view of glowing flat-screens.
Seeing those TVs regularly may make shoppers more likely to think of the discounter when they need to one. "Wal-Mart has made it no secret that [it is] looking to be the No. 1 electronics retailer out there, just as [it] solidified the top spot in grocery retailing a few years back," said Alison Embrey Medina, executive editor of DDI magazine, an Alpharetta, Ga., publication devoted to retail design issues.
The home goods area includes a display of coffee makers on counterlike fixtures that make it easy to envision them in a kitchen, and presentations of bathroom towels are now organized by color for a classy look and ease of shopping.
Wal-Mart also is editing its merchandise to keep the most popular items, and it is trying to simplify prices. Ms. Mora pointed out a display of Wrangler jeans selling for $11.50 with a sign easily visible from the nearest aisles. Many prices are now set at a flat dollar amount rather than the retail tradition of $3.99 or $5.98.
Ms. Skrovan at Retail Forward was enthusiastic about the overall project and its potential, but noted there were challenges. Given the large store base, she wrote, the work will take years to complete. "Unfortunately, some shoppers will continue to see only the 'old' Wal-Mart for years to come."
So far, the retailer has put up better sales results than many other chains coping with the recession.
Meanwhile, Ms. Mora said customer feedback to the Waterworks store has been good. "They notice it's brighter and more open, and they have the impression the store is bigger." At the official launch in mid-October, the store staff was told that sales were better than average for the market for the week.
Teresa F. Lindeman can be reached at tlindeman@post-gazette.com or at 412-263-2018.
First Published October 28, 2009 12:00 am
