NEW YORK, N.Y. – Wal-Mart and Target are each taking a cue from the other this holiday season.
After years of emphasizing low prices, Wal-Mart wants to up the ante, but it also wants to be known for top customer service. Target, which has a better image in that regard, has stressed a focus on offering deals.
The shift underscores how traditional retailers have to perfect every aspect of their operations as shoppers who could easily shop online instead become more demanding about price, selection and service. With online leader Amazon.com cementing customers with its juggernaut Amazon Prime shipping service, retailers like Target and Wal-Mart need to offer more exclusive merchandise.
Heading into the critical holiday shopping season, Wal-Mart has the momentum. The Bentonville, Arkansas-based company raised its profit outlook in August after reporting its eighth consecutive quarterly increase in a key revenue measure. Target had cut its profit forecast as customer traffic fell for the first time in a year and a half during the second quarter. Its key revenue measure also fell.
“Wal-Mart has been benefiting from better service and for this holiday season, it should be a boon,” said Ken Perkins, president of research firm Retail Metrics LLC. “I expect Wal-Mart will outpace Target. Target has a big price hurdle.”
Wal-Mart has been working to improve service in its stores, and its move to raise wages and increase training for hourly workers has helped.
For the end of the year, the world’s largest retailer plans to deploy “holiday helpers” stationed at the checkouts, who can direct customers to registers with shorter lines or even run back to the aisles to pick up an item someone forgot.
It’s adding staff to handle customers picking up online orders at the stores, and designating a manager for that area. During the holiday season, Wal-Mart sees five times as many same-day pickup orders compared to a normal week. The goal: To make sure shoppers have an easy experience when they come to collect their orders.
“We want to serve the customer as they want to be served,” Wal-Mart’s Chief Operating Officer Judith McKenna, said at a store in Teterboro, New Jersey, on Wednesday.
For service, Target is also focusing on making online ordering and pickups easier. Starting Nov. 1, it’ll have 1,106 stores that will ship directly to online shoppers, double the current number. That should speed up delivery, and Target will be able to fulfil more orders. Online shoppers also can pick up their orders at all of Target’s stores.
Wal-Mart promises to be even more aggressive on prices as part of an investment of several billion dollars over the next few years. It similarly plans to offer more consistent pricing, instead of shorter-term deals. For example, a Roku 32-inch HDTV that was priced at $125 last year during a Black Friday sale will have the same price all season this year. Skinny jeans that sold last year for around $9 are now $7.88.
Target, which has acknowledged that it failed to deliver on the second part of its “Expect More, Pay Less” slogan, say about 60 per cent of its marketing message this holiday season will be about value, up about 20 per cent from last year. The Minneapolis-based retailer is repeating some of last year’s promotions but also adding new ones aimed at getting shoppers to more areas of the store.
“Value is the No. 1 determiner of where a guest will shop,” said Rick Gomez, Target’s senior vice-president of marketing.
Target is also extending its free shipping promotion by a week, waiving the shipping fee for all digital orders from earlier this week to Jan. 1.
Wal-Mart doesn’t plan to waive the $50 minimum for free shipping, but noted that online shoppers who spend less than that can opt for store pickup.
Both Target and Wal-Mart are offering even more exclusive products.
Wal-Mart is offering 400 exclusive toy items including what is already a hit — a Disney Princess Carriage priced at $398. It’s also adding thousands more items that will be available for store pickup.
Target is offering 1,800 new or exclusive toys, about 15 per cent more than last year. Another exclusive is a 10-disc box set from Garth Brooks, which includes his new album and the 25th anniversary edition of “Friends in Low Places.” The set will be in Target stores Nov. 11, two weeks before the new album is available elsewhere.
Wal-Mart is also planning more product demonstrations, in departments from toys to food. And Santas who used to remain stationary will roam the stores for more customer interaction and selfies.
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