Wal-Mart Focuses on Improving Customer Experience

JOHN KAROLEFSKI

LAS VEGAS — Wal-Mart is leveraging the insights gathered from custom market research to improve the customer experience in its stores, a company executive told attendees at a marketing conference here.

The research ranges from a study of shopper segmentation to an analysis of traffic patterns and merchandising tactics using a virtual shopping platform.

“We're working continuously to improve the customer experience in-store,” said Candace Adams, senior director of insights and consumer strategy for Bentonville, Ark.-based Wal-Mart Stores. “This includes understanding our shoppers, how they shop our stores, their underlying purchase dynamics, as well as coming up with innovations for store formats.”

She outlined the work during a keynote presentation here last month at the In-Store Marketing Expo, hosted by the In-Store Marketing Institute.

Adams explained that Wal-Mart has high shopper penetration (86% of U.S. consumers shop there), and that figure likely won't increase much. So the new strategy is to encourage people to shop at Wal-Mart more often and to buy more while there.

“That's why we rely on shopper insights, segmentation and a host of other research tools,” said Adams, who leverages several types of in-store research as part of her job of cultivating the customer in-store experience.

Among the several types of Wal-Mart shoppers determined by segmentation research are “price-value shopper,” “brand aspirational” and “price-sensitive affluent.”

“What they all have in common is that they are all looking for value,” she said. “For example, the price-sensitive affluent refuse to pay a higher price just because they can.”

But the segmentation research has also shown that Wal-Mart should not just be about low prices, Adams was quick to add. The stores need to stock the right products in the right place at the right time.

“Doing the segmentation has helped us differentiate ourselves as a brand, so that we're not just a warehouse that has products in it,” she said. “That sounds like a lot, but we can break it down. First, we need to find out what our customer preferences are. That means getting to know who our customers are through our segmentation. But even with segmentation, there might be differences based on the part of the country you live in, race and ethnicity. So, in addition to segmentation, we overlay learning about our customers through demographics.”

Adams said Wal-Mart aims to understand shoppers better with research using a virtual shopping platform, which essentially builds a store from the ground up on a computer screen. The retailer can get shopper feedback on proposed changes in-store without tipping off the competition by testing in actual stores. For example, the virtual platform enables Wal-Mart to tinker with shelf alignments, on-shelf positioning and endcap displays' impact on category sales.

Virtual retailing also helps Wal-Mart enhance the shopping experience by studying various traffic patterns and different department configurations and decor.

“We have to engage the customer in our stores,” she stressed. “It's not only about providing the products; it's about providing an experience. We have to make shopping convenient by making products easy to locate. You shouldn't have to go down a 96-foot gondola to get to the product you're looking for. So one of the things we have done is break down our aisles and turned them in different directions. The navigation is a lot easier [in a handful of test stores, with more rolling out next year].”

Wal-Mart is also using the virtual platform to provide more “clarity” to its stores, according to Adams. For example, making the electronics department “more open and more shopable.” Also, more colors have been added to grocery to make the department more appealing.

Shoppers want to get in and out of stores quickly and be treated with respect from cashiers and other store workers, according to Adams. Their behavior affects the in-store experience. Consequently, Wal-Mart has researched the demeanor of store employees to find out how helpful and pleasant they actually are.

“We need to develop a training program to make our staff friendlier and more helpful,” she said.

Adams called on the manufacturers in the audience to help Wal-Mart improve the shopping experience in its stores. She urged them to leverage their category and customer expertise to drive category growth and to appeal to specific consumer segments.

“You can help us be more successful if you help us drive category growth and not focus on the brands so much,” she said. “There is an opportunity for us to work together to drive the category.”

Going forward, Adams plans to research product adjacencies, study ways to increase shopper loyalty and improve “conversion rates.”

“If we can get people who are in our stores to purchase more products, then it's a win,” Adams said.