Wal-Mart's John Fleming said the retail giant is trying harder to customize its mix of goods to the local community around each store.
Mr. Fleming, exec VP-chief marketing officer of Wal-Mart's Wal-Mart Stores Division, said the retailer is working to base product selection in stores more on the needs of the local community rather than taking a one-size-fits-all approach.
"We have to get smarter on how we edit the [product] categories" based on store location, he said. Mr. Fleming, keynote speaker last week at Advertising Age's The American Consumer Conference in New York, said the mandate fits into Wal-Mart's overlapping goals of better managing inventories, improving the shopping experience, offering higher-quality goods and trying to win over "skeptical" consumers. More than 130 million U.S. consumers-approaching half the population-already shop at Wal-Mart, the nation's biggest store, Mr. Fleming said. But the challenge, he said, is to get those customers to shop more often and across more departments.
On this score, Wal-Mart now is categorizing its customers in three groups:
Loyalists, who on average visit 57 times a year, spend 77% of their grocery dollars at the store and shop across more than five product categories.
Selective customers, who come through the doors 26 times a year, spend 28% of their grocery dollars and shop two to four categories.
Skeptics, who shop five times a year, do less than 10% of grocery shopping at the store and shop departments for only their most pressing needs.
A key goal, he said, is to win over those skeptics. That's one reason he said Wal-Mart has changed its ads to focus more on product quality and the shopping experience. Consumers already assume Wal-Mart has low prices, he said, so the retailer has an opportunity in advertising to talk about issues other than price. Mr. Fleming brought up five key consumer insights along with Wal-Mart's response: