Learning from Walmart

From "It’s Not Only About Price at Wal-Mart," in the New York Times:

In their first interviews since a management shuffle last month, John Fleming, the new chief merchandising officer, and Stephen Quinn, the new chief marketing officer, said that after a year of intense research, the discount giant is seeing its 200 million customers as belonging to three groups.

There are “brand aspirationals” (people with low incomes who are obsessed with names like KitchenAid), “price-sensitive affluents” (wealthier shoppers who love deals), and “value-price shoppers” (who like low prices and cannot afford much more).

The new categories are significant because for the first time, Wal-Mart thinks it finally understands not just how people shop at its stores, but why they shop the way they do. The recalibration might seem subtle. But when the company is Wal-Mart, whose $345 billion in sales exceeds those of its next four rivals combined, the stakes are unusually high, especially for Mr. Fleming and Mr. Quinn.

This is important, basic, but important.

Last week, in a comment, I mentioned the basic understanding of retail shopping behavior, from a document from Bradley University, "Choosing a Retail Location" :

TYPES OF CONSUMER GOODS

Another factor that affects site selection is the customers' view of the goods sold by a store. Customers tend to group products into three major categories: convenience, shopping, and specialty goods.

1. Convenience goods usually means low unit price, purchased frequently, little selling effort, bought by habit, and sold in numerous outlets. Examples: candy bars, cigarettes, and milk. ...

2. Shopping goods usually mean high unit price, purchased infrequently, more intensive selling effort usually required on the part of the store owner, price and features compared, and sold in selectively franchised outlets. Examples: men's suits, automobiles, and furniture.

3. Specialty goods usually mean high unit price, although price is not a purchase consideration, bought infrequently, requires a special effort on the part of the customer to make the purchase, no substitutes considered, and sold in exclusively franchised outlets. Examples: precious jewelry, expensive perfume, fine furs, and so on, of specific brands or name labels.