Problem Statement & customers
Every week, an estimated plethora of 100 million customers, nearly one-third of the US population shop at Wal-Mart’s US stores. Wal-Mart customers give low prices as the most important reason for shopping at their stores, reflecting the “Low prices, always” image it has been projecting ever since, an advertising slogan that Wal-Mart used from 1962 until the present. The average Wal-Mart customer’s income is below the national average, which analysts recently estimated that more than one-fifth of them lack a bank account, twice the national rate.
A Wal-Mart financial report in 2006 also indicated that Wal-Mart customers are sensitive to higher utility costs and gas prices. A poll before the 2004 US Presidential Election indicated that 76% of voters who shopped at Wal-Mart once a week planned to vote for George W. Bush, while only 23% planned to vote for John Kerry. When measured against other similar retailers in the US, frequent Wal-Mart shoppers were rated the most politically conservative which was a surprising notion (“The Wal-Mart Timeline.
” Wal-Mart (published on walmartfacts. com), July 24, 2006). Wal-Mart took steps to expand its US customer base in 2006, instigating a modification in all of its stores from a “one-size-fits-all” merchandising strategy to a custom-fit merchandise assortment designed in order to represent each of six demographic groups namely: African-Americans, Hispanics, the affluent, empty-nesters, suburbanites and rural residents as well.
The company unveiled a new slogan: “Saving people money so they can live better lives” in late 2006. This reflects the three main groups into which Wal-Mart categorizes its 200 million customers: brand aspirationals, price-sensitive affluents, and value-price shoppers (Staff Writer. “Wal-Mart tests similar hypermarkets – Hypermart USA, Wal-Mart SuperCenter. ” Discount Store News, March 28, 1988).