Monday, September 11, 2006

Wal-Mart: niche marketer?

A news article on the International Council of Shopping Centers website says that Wal-Mart is ...
...effectively breaking its 3,400-unit U.S. division into six smaller chains that will target specific consumer segments: affluents, African-Americans, boomers, Hispanics, rural residents and suburban residents. For example, stores aimed at African-Americans will feature more urban-style apparel and ethnic hair care products in addition to expanded gospel and rap music selections. The chain is renovating units at the rate of about 300 stores per year to reflect the new merchandising strategy ...
A few stats were cited that indicate success with the idea:
So far, 200 stores have undergone conversion, he said. At one Houston store recently converted to the Hispanic-targeted model, sales per square foot are 7.6 percent higher and gross margins are 156 basis points higher than those at other Houston Wal-Marts, he said. At a suburban Chicago store converted to the African-American-targeted model, gross margins are 250 basis points higher than other area stores.
Sounds like a good idea, but I wonder if Wal-Mart's legendary logistical efficiency can stand the strain of supplying six chains simultaneously.

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