WAL-MART NEARS TOP IN SHOE SALES

Gaining Market Share on Category Leader Payless ShoeSource

By Published on .

SAN FRANCISCO (AdAge.com) -- Wal-Mart Stores turns up the heat in the $40 billion shoe category as it gains share and catches up to leader Payless ShoeSource.

Payless, in an effort to hold on to its slim lead over the retail behemoth, will break its first major back-to-school effort focusing on children's shoes, which comprise about 25% of the store's sales, said John Haugh, chief marketing officer and senior vice president of business development.

"Our belief is that when moms are looking

Related Stories:
WAL-MART SAID TO BLOCK VENDORS' PRICE HIKES
Meanwhile, Food Consumers Flock to Lower-Price Private-Label Products
BEMOANING THE NEW REALITIES OF A DISCOUNT WORLD
Marketers Wag Fingers at Wal-Mart's 'Dangerous Thing'
WAL-MART STOMPS TO TOP OF SUPERMARKET HEAP
Centralized Buying, Special Treatment Lures Flocks of Marketers for Product Launches
'VIEW' HOST NAMED SPOKESWOMAN FOR SHOE CHAIN
Star Jones to Serve as 'Chief of Consumer Style' for Payless
to put kids in the best-made shoes, we are the clear choice," Mr. Haugh said. "If they are looking only for cheap covering, they can find lots of spots."

Consumer preference
According to a new BIGResearch study, in July 2002, Payless was the nation's No. 1 preferred shoe retailer, with a 19.5% of consumers listing Payless over any other retailer, while Wal-Mart had a 15.5% share. In figures about to be released for July 2003, Payless dropped to 16.4%, barely surpassing Wal-Mart's 16.3% share. According to BIGResearch, consumer preferences usually correspond closely to market share.

"We are neck and neck overall," Mr. Haugh said. "It's certainly something we pay attention to. We are a specialty retailer. We can provide more selection, quality and value," he said. He also believes Payless as well as Wal-Mart will be able to garner market share from other shoe sellers, including department stores, boutiques and independents.

Shoe diva Star Jones
Payless last year began a repositioning focused on fashion featuring talk-show host and shoe diva Star Jones, who shows up at the end of the TV spot noting that a child who is fashion conscious is being properly reared. Payless also has trained its sales personnel to offer parents the opportunity to use a fitting device to ascertain a child's correct fit. Barkeley Evergreen & Partners, Kansas City, is the agency.

Gary Drenik, president of BIGResearch, said Wal-Mart's biggest problem is the image of its customer as representative of a lower-income demographic, an image he said is outdated.

Fashion makeover
Wal-Mart, usually publicity shy, also is starting to make over its fashion image, with a public relations effort forecasting fall fashion trends. Wal-Mart public relations executives recently released information about back to school trends. For shoes, it predicted this fall's most popular shoe style as the Euro-sport look with leather slip-ons, contrasting colors and chunky soles. Wal-Mart shoes will be featured in its circulars and will be shown as part of outfits presented in its fall TV campaign, a company spokeswoman said. Wal-Mart last October rolled out Footstar's Thom McAn brand, and is expanding its trendy apparel brand, George, into footwear.

Wal-Mart has outperformed the retail category, according to NPD Fashionworld data. In 2001, the overall dollar sales of footwear declined by 8%, while Wal-Mart sales dropped only 4%. Overall, U.S. footwear sales dropped 5% from 2001 to 2002, from $42.5 billion to $40.4 billion, according to NPD.

And the winner is...
"These two are battling it out, and Wal-Mart will eventually win," Mr. Drenik said.

Payless' Mr. Haugh said he nevertheless will focus not on the competition but on his customer, rolling out a men's effort next. "In the end, Wal-Mart doesn't buy any shoes from us," he said.

In this article:
Most Popular