Retail

And The Average Walmart Shopper Is…?

By PYMNTS

Posted on October 13, 2016

The average Walmart shopper is a white, 50-year-old woman with an annual household income of $53,125.

Since Walmart is the nation’s largest retailer, operating more than 11,000 stores globally and 4,300 in the U.S. alone, and takes in about $480 billion in sales annually, the insight into the retail giant’s average customer is particularly interesting and comes about thanks to Kantar Retail, a retail analytics and consulting firm.

Kantar Retail surveyed more than 4,000 consumers on their shopping habits in 2015 and compared Walmart customers to Target, Dollar General and Family Dollar customers and all shoppers.

Target shoppers, by comparison, average about five years younger and make about $12,000 more annually than the typical Walmart shopper; Target also has the highest rate of customers who make between $75,000 and $99,900 annually, at about 15 percent, and the highest rate of customers who make more than $100,000 a year, approximately 25 percent.

Walmart, by comparison, has about 10 percent of its customer base who makes between $75,000 and $99,900 annually, and a little bit more than 15 percent of its customer base makes more than $100,000 a year.

“The final growth area I want to highlight is appealing to a blend of income levels,” Walmart CEO Doug McMillon told a group of analysts last October, noting areas where he believed the retail giant still had room to grow. “Globally, we know growth will disproportionately come from middle- and upper-income households in the years ahead. In markets where we have a presence, middle-income households are projected to drive 50 percent of total retail growth. Today, we appeal to value-oriented customers in all brackets.”

Target leads Walmart when it comes to customers between the ages of 18 and 44, with Target’s largest sector lead over Walmart in the 25–34 age demographic. But Walmart beats Target when a customer turns 45, and that lead only seems to expand as they age, because Walmart has almost 10 percent more customers 65 and over compared to Target.

Dollar General and Family Dollar also seem to grow in popularity as a customer ages. But when it comes to the household income of Dollar General and Family Dollar customers, they tend to be much lower, averaging less than $46,000 for both chains. About 40 percent of Family Dollar’s customers, for example, make less than $25,000 annually.

Target beats Walmart with millennial customers, with about 28 percent of its customers born between 1982 and 2002, compared to only about 17 percent of Walmart customers. Target also leads in Gen X customers born between 1965 and 1981, with a little more than 30 percent of its customers, compared to about 28 percent of Walmart customers.

Walmart dominates when it comes to baby boomer customers compared to Target, with baby boomers making up about 40 percent of Walmart’s customer base compared to only about 30 percent of Target’s — although Dollar General led the way with almost 45 percent of its customer base being baby boomers.

Walmart customers who do the bulk of the household shopping are more likely to be male, while Target has a greater number of females who do the bulk of the household shopping at around 80 percent (compared to about 73 percent for Walmart).

The study offers a fascinating look at the typical Walmart shopper and the hurdles the retail giant could face as it tries to boost its online presence and appeal to a more affluent customer base.

Walmart’s acquisition of Jet.com is being seen as an attempt to cater to this more affluent, more youthful demographic, as Jet’s customers tend to be younger and wealthier — but Walmart still appears to have a long way to go if it wants its consumers to think of it as more than just a discount retailer.

“While the need for Walmart to move to serving a wealthier clientele is real, it’s going to be a difficult task to reframe Walmart in that consumer’s mind,” said Doug Stephens, author of “The Retail Revival: Re-Imagining Business for the New Age of Consumerism” and the Retail Prophet blog, in a January interview with Retail Dive. “Sam Walton committed his life’s work to positioning and retrenching Walmart as a chain built by and for the middle class. To move further up-market means fighting a strong current of corporate DNA, not to mention risking turning off existing customers. It’s the proverbial ‘rock and hard place’ scenario.”

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Retail

Walmart Boosts Manager Pay To Skirt Overtime Rules

By PYMNTS

Posted on October 13, 2016

Some of Walmart’s managers are getting a pay raise, but it could be so that the retail giant can circumvent new federal overtime rules, according to a Reuters report.

Last month, Walmart raised the starting pay for its managers from $45,000 to $48,500; the new federal overtime regulation, which takes effect Dec. 1, will require employers to pay overtime to any employee earning less than $47,500 annually, double the current limit of $23,660.

“We think the starting rate of $48,500 a year … would make a lot of business sense for our company,” Randy Hargrove, a Walmart spokesman, told Reuters.

Walmart did not specify how many employees would be receiving the raise. Currently, Walmart is the largest private employer in the U.S. and employees about 1.5 million employees in a variety of positions that include store staff, managers and truck drivers.

Walmart also announced in September intentions to pay more than $201 million in second-quarter bonuses to hourly store employees after 99 percent of its stores met self-imposed targets for cleanliness, service and faster checkout times. The company also increased entry level wages to $10 an hour early this year and said in December of last year that it planned to invest an additional $2.7 billion in employee compensation and training over the next two years.

All these announcements come as Walmart cut around 7,000 back-office accounting and invoicing jobs over the summer.

Lands’ End’s Ongoing Woes

By PYMNTS

Posted on October 13, 2016

Lands’ End, the fashion apparel, accessories and home furnishing retailer, has never been known as a company to make a lot of waves.

Which is why it was somewhat noteworthy when the company hired Federica Marchionni, the Italian-born former head of Dolce & Gabbana’s U.S. operations, to be its new CEO in Feb. 2015.

And after a series of controversial moves — such as interviewing feminist icon Gloria Steinem for its 2016 spring catalog, then pulling that catalog in the face of outcry, or introducing new activewear and Canvas lines — she was relieved of her duties by Lands’ End’s board on Sept. 26 after only 19 months on the job.

But Retail Dive believes that Marchionni’s rocky tenure and bumpy departure are far from Lands’ End’s only problems, as the brand has had six CEOs since 2002 and still struggles with its brand image and identity as a retailer with millennials increasingly more interested in fast-fashion knockoffs.

“Success has so many parents, and failure is orphan,” Steven L. Marotta, senior vice president and senior research analyst at C.L. King & Associates, told Retail Dive. “I think that the near-term result of the plan [Marchionni] was implementing is that everyone is now trying to take themselves out of the equation and pin it on her.”

Even with Marchionni as the latest scapegoat of Lands’ End’s seemingly ongoing woes, Retail Dive believes that the retailer still faces plenty of problems.

Although Sears got rid of Lands’ End as a brand in late 2013, most of its 253 remaining retail locations still exist inside Sears stores and are obligated to rent those locations from Sears through 2019.

Lands’ End also reported a dip in second quarter revenue, down to $292 million from $312.4 million the previous year, while its retail segment net revenue fell 4.3 percent to $45.5 million and its net revenue dipped 6.9 percent to $246.4 million.

“Most stores today are suffering from too much physical square footage while trying to grow their online sales,” Dick Seesel, principal at Retailing in Focus, a retail strategy consultancy, told Retail Dive. “Lands’ End is an exception. It’s a company without enough stores, outside of its continuing presence inside Sears.”