Problem:
Please read the article illustrated below "Wal-Mart's Fashion Faux Pas" about Wal-Mart failed attempt to persuade consumers to buy high end items at its store., and address the following question.
As a marketing consultant to Wal-Mart (hired to help the corporation achieve its goal of getting a segment of the consumer market to purchase expensive, higher quality items at its stores) what communications message(s) and strategy (ies) would you suggest Wal-Mart use to get a segment of consumers to think of Wal-mart as the store where they can find high quality but more expensive items (rather than just the best quality at the lowest price)? Be sure to incorporate as many concepts as you find relevant of Learning and Memory, attitudes, communication, Guerrilla marketing, Viral marketing, social networking and opinion leadership as well as the pertinent lingo.
Article:
Wal-Mart's Fashion Faux Pas; Discounter's Effort to Upgrade Style Falls Flat, Casting a Shadow Over Holiday Sales Prospects
Abstract (Document Summary)
It's all part of the effort to get Jennifer Gildea to shop in Wal- Mart stores for more than just tank tops, T-shirts and socks. Like other fashion-conscious shoppers, Ms. Gildea, a 20-year-old Pennsylvania college student, says she likes some of what she has seen of Wal-Mart's apparel, but she doesn't buy it. Crowded display racks and minimally private dressing rooms in the center of the sales floor make the Wal-Mart she visits "hard to shop," she says. She buys most of her clothing at Express, a unit of Limited Brands Inc., instead.
Patricia Edwards, a portfolio manager at Wentworth, Hauser & Violich, follows Wal-Mart, visiting stores and talking to employees there. She says she was disappointed to see clashing colors and contemporary styles mixed in with traditional items on a recent trip to a Seattle location. "Wal-Mart gets part of the story right most of the time, but they don't get the whole thing," Ms. Edwards says. Store managers have been loath to spend money and employee-hours implementing the retailer's showcase ideas, she says. And company merchandisers "don't have much clout" to force change, she says.
Wal-Mart's efforts in the fashion realm haven't made much of an impression on its women customers, according to surveys by America's Research Group, a company that polls at least 8,000 homes each week. C. Britt Beemer, founder of the Charleston, S.C., company, says shoppers' views of Wal-Mart apparel haven't changed much in the past few years. "I can't find any significant difference between a year ago, two years ago, and today among women," Mr. Beemer says. Wal-Mart has "devoted a lot of energy to it, but it doesn't appear the consumer has had any positive response."
Full Text (1207 words)
(c) 2005Dow Jones & Company, Inc.Reproduced with permission of copyright owner.Further reproduction or distribution is prohibited without permission.
WAL-MART STORES Inc. has been trying hard in recent years to raise its fashion quotient, signing up high-visibility designers, hiring New York trend spotters to reel in the latest looks and even sending Wal- Mart clothes down the catwalk at Fashion Week.
It's all part of the effort to get Jennifer Gildea to shop in Wal- Mart stores for more than just tank tops, T-shirts and socks. Like other fashion-conscious shoppers, Ms. Gildea, a 20-year-old Pennsylvania college student, says she likes some of what she has seen of Wal-Mart's apparel, but she doesn't buy it. Crowded display racks and minimally private dressing rooms in the center of the sales floor make the Wal-Mart she visits "hard to shop," she says. She buys most of her clothing at Express, a unit of Limited Brands Inc., instead.
Four years after launching the first of several designer labels, Wal-Mart has yet to convert many of its socks-and-denim shoppers into fans of its more fashionable -- and more profitable -- apparel offerings. Sales at Wal-Mart stores open at least a year rose a paltry 1.3% in September, and apparel sales were a big reason why. Clothing sales last month "failed to meet our expectations," the company conceded in a statement. Wal-Mart doesn't break out sales figures for apparel.
The company's lackluster apparel gains come despite a major push starting a year ago to improve its apparel, including the opening of a New York trend-spotting office and layering on more quality control.
The results are especially troubling given that September was a booming time in the rag trade. The Lazard Retail Index for department stores rose 8.8% in September, and the investment bank's specialty retail index rose 5.5%. Excluding sales for the slumping Gap Inc., the specialty index would have soared 9.5%, says Todd Slater, a retail analyst at Lazard Capital Markets. "That was the best month in at least a year and a half," he says.
Soft apparel sales could drag down Wal-Mart's overall holiday results. A recent survey of the holiday-shopping plans of some 1,800 consumers by NPD Group, the Port Washington, N.Y., market research firm, put clothing at the top of most-likely gift purchases this year, with consumer electronics following at a distant second.
Wal-Mart declined to comment for this article. It has attributed some of its recent sales lethargy to higher energy prices. Higher gasoline prices do take some discretionary spending power out of consumers' hands. But gasoline prices dropped sharply in September, and Wal-Mart didn't get a noticeable bounce.
Meanwhile, Target Corp. continues to bolster its reputation for cheap chic by showcasing different young designers every few months. Starting Nov. 1, an inexpensive collection from New York designer Behnaz Sarafpour will start a three-month run in Target stores. Target rang up a 6.7% same-store sales gain in September.
Merchandising in Wal-Mart's 3,800 U.S. stores has been inconsistent. The company's first designer label, called George, is largely an unknown in the U.S., although in Britain it is well-regarded and sold in stand-alone George stores. "To this day, I don't think anyone knows who George is," says Wendy Liebmann, president of the consulting firm WSL Strategic Retail. (The label is named after the British designer George Davis.)
Even as Wal-Mart stores are struggling to tempt customers away from their own grocery aisles and over to the fashion displays, external rivals are presenting stiff competition to Wal-Mart's clothing business, too. Deep discounters and dollar stores are starting to sell more jeans, sports jerseys and underwear -- apparel categories Wal- Mart has always counted as reliably strong. Meanwhile, off-price specialty chains -- Dress Barn Inc. and TJX Cos.' Marshalls and T.J.Maxx chains -- are emerging as price-conscious shoppers' favored apparel destinations, offering convenient locations and the thrill of the treasure hunt.
Wal-Mart may remain many shoppers' first choice for paper towels, cleaning products or cosmetics. But the resurgence of neighborhood strip malls, many of them redeveloped with stores in upscale chains, have blunted the convenience edge that Wal-Mart and other discounters used to represent, says Richard Hastings, retail analyst with credit- rating agency Bernard Sands LLC. These strip malls "left them vulnerable to competition from specialty retailers," he says.
And part of the problem may be that Wal-Mart isn't fully supporting the new clothes lines it brings out. Advertising is often sporadic. Wal-Mart began an ad campaign for its clothes in Vogue magazine last year, but its TV commercials don't emphasize fashion. The company also recently pulled the plug on the Hub, a social networking Web site it created three months ago to showcase teen apparel.
Wal-Mart has continued to add new fashion brands, including Exsto, a hip-hop line for young men designed by G-III Apparel Group, and George ME knit clothing for women from the designer Mark Eisen. Wal-Mart is taking steps to address mixed merchandising messages. This year, it began adding faux-wood floors in the women's departments, part of an effort to reduce clutter and make shopping there more appealing.
Some shoppers are taking notice. Debbie Koeppel, a 48-year-old Dallas mother, says she once shopped at Wal-Mart solely for food and consumable goods. She says she was pleasantly surprised by the quality of a George skirt that she found on a recent shopping trip and wore the skirt and a George blouse to Rosh Hashana services and got several compliments.
"Some of these newer [stores] are lovely," says Ms. Koeppel, a former Neiman Marcus employee. "I don't know that I'd be buying my entire wardrobe there, but I love that skirt."
Wal-Mart also is trying to avoid clearance aisle clutter. Starting with its women's department, Wal-Mart plans to implement "price- optimization" software, which uses mathematical models to recommend when to take markdowns, taking regional sales trends into account. The goal is to minimize out-of-season leftovers, which are unappealing to the fashion-conscious shoppers Wal-Mart wants to attract.
All these efforts, though, will take time. Meanwhile, amid Wal- Mart's plans to remodel 1,800 U.S. stores by mid-2007, shoppers at many stores are left to pick over crammed racks to find the brands Wal-Mart hopes will entice women to its better apparel.
Patricia Edwards, a portfolio manager at Wentworth, Hauser & Violich, follows Wal-Mart, visiting stores and talking to employees there. She says she was disappointed to see clashing colors and contemporary styles mixed in with traditional items on a recent trip to a Seattle location. "Wal-Mart gets part of the story right most of the time, but they don't get the whole thing," Ms. Edwards says. Store managers have been loath to spend money and employee-hours implementing the retailer's showcase ideas, she says. And company merchandisers "don't have much clout" to force change, she says.
Wal-Mart's efforts in the fashion realm haven't made much of an impression on its women customers, according to surveys by America's Research Group, a company that polls at least 8,000 homes each week. C. Britt Beemer, founder of the Charleston, S.C., company, says shoppers' views of Wal-Mart apparel haven't changed much in the past few years. "I can't find any significant difference between a year ago, two years ago, and today among women," Mr. Beemer says. Wal-Mart has "devoted a lot of energy to it, but it doesn't appear the consumer has had any positive response."