Back in September I commented Wal-Mart's (NYSE:WMT) new ads were "simple and brilliant". It would seem I am not alone. For the first time in recent memory, Wal-Mart has won the Holiday sales battle with Target (NYSE:TGT). There are two simple reasons. The new ad campaign started in time for the holidays and the success of Walmart.com's "site-to-store" program.
"Save Money, Live Better"
In May I lamented:
I have been in 4 Wal-Marts the past 2 weeks and one thing sticks out.
They have not changed at all the past 7 years. Everything feels the
same, the look , the merchandise, the people, everything.
Wal-Mart's image has taken a hit. When people want something "cheap" they think Wal-Mart, when the want a value, they think "Target".
With one simple phrase (and a few billion invested in the stores), Wal-Mart changed that. Going from "Always Low Prices" which, to be honest, was a line best suited for the Dollar Stores to "Save Money, Live Better" changed the perception of Wal-Mart's operations. The commercials focused on family trips and gave an emotional element to their advertising that had never been there before. Guess what? It worked. Credit the Martin Agency, ranked by Advertising Age as one of the top five agencies of the year in 2006.
In July, after my first try at the program, I posted "Wal-Mart said that "more than 50 percent of Site-to-Store orders [came] from new customers who make their first purchase at Walmart.com using the service." The chain also reported a 20 percent increase in the number of Site-to-Store "customers who spend an additional $60 on purchases in the store when picking up their orders."
This clearly spilled over into the holidays. I actually was one of these folks, as we ordered items for the kids on "Black Friday" and picked them up in the store 7 days later, and while there, picked up several other items. This option, for some inexplicable reason is not available at Target. The best part of the program is that I can buy thousands of items not in the stores, making my local Wal-Mart even larger.
The thing about retail is that it is hard to change perceptions once they are set in consumers minds. Now that Wal-Mart has managed to finally do that, as the economy slows, any hope Target had to turn the tide anytime soon is all but lost. Shoppers have clearly bought into Wal-Mart's tag line and as times get tougher, this will become even more apparent.
If all this is not bad enough for Target, the death comparison was recently made. Craig Johnson, president of retail consultancy Customer Growth Partners said "As a merchandiser, you can't ignore the customer experience. The level of helpfulness in Target stores is approaching Home Depot (NYSE:HD) territory." OUCH!