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Vijay Viswanathan

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Vijay Viswanathan
Agenda
Current Scenario
Target Success Story
Wal-Mart Watch
Magazines
3
Retail Sector
An estimated two-thirds of the U.S. gross domestic product
(GDP) comes from retail consumption.
Total retail sales in 2011 was $4.7 trillion an 8% increase over
2010. (U.S. Commerce Department)
64% of consumers planned on spending less in the nation's
retail stores.
Experts are estimating the after effects of the recession will last
from 18 months to 11 years.

4
Retail Sector Facts
Five of top 10 largest retailers are in US.
14.4 million people were employed in the U.S. Retail
Industry as of April, 2010.
Retail technology - particularly the integration of internet
shopping with mobile phone devices - will be the hottest
trend in the U.S. retail industry.
Frugality and conscious consuming are expected to
continue in U.S. retailing due to continuing high
unemployment.
Greatest risks The two greatest risks indicated by
respondents to Aons 2011 Global Risk Management
Survey are economic slowdown and damage to
reputation/brand.

Source: http://retailindustry.about.com/od/statisticsresearch/p/retailindustry.htm
Risks in Retail
Numbers
7
Wal-mart
Total Stores 3,898
Discount stores (614)
Supercenters (3,060)
Supermarkets
1
(209)
Small formats
2
(15)
Target
Total Stores 1,763
General Merchandise
(1512)
Supercenters (251)
Sams Clubs
Total Stores 612
Source: http://en.wikipedia.org/wiki/List_of_assets_owned_by_Walmart.
http://media.corporate-
ir.net/media_files//IROL/65/65828/TGT/FY%202011_%20Historical%20Number%20of%20Stores.pdf
Profiles
Median age of 40
Median household income of
approximately $64K
Approximately 43% have
children at home
About 57% have completed
college

8
Median age of 44
Median household income of
approximately $40K
Approximately 40% have
children at home
About 43% have completed
college
Target
Merchandising strategy
Private label goods
Clear customer (guest) target segment
Fewer changes and continued strategy
Brand image of Hip, trendsetting big box store
Wealthier shoppers
Red Card and Red Channel
Source: http://classic.marshall.usc.edu/assets/080/16334.pdf
Wal-Mart in Crisis..!
Same store sales flat lining
Blame it on the weather??
Flopped Store remodeling project
Failed attempt to attract upscale
customer
Negative publicity
Back fired emulation

Price sensitive loyal customers



10
Source: http://walmartwatch.com/wp-content/blogs.dir/2/files/pdf/growth_report


Source:
http://www.ftsmodules.com/public/texts/valuationtutor/VTchp3/topic8/topic8.htm
Wal-Mart
During recession people preferred low cost Wal-
Mart stores.
Sales and stock prices started increasing.
46% of sales from grocery.

Source : http://eliteinsidetrader.com/2011/06/20/wal-mart-thrives-during-recession-whats-their-secret
Target
Economic slowdown = Lesser sales in Target.
Only 20% sales preference lies in food and
grocery.
Unsuccessful credit card business.

Source: http://www.time.com/time/business/article/0,8599,1885133,00.html
14
Wal-Mart Shrinks Magazine Racks
Wal-Mart has knocked magazines several rungs down on
its hierarchy of sales priorities.
Decided to move magazine racks to the back of the store.
Magazine frontage display area to be reduced by half.
"Project Impact






Source: http://www.mediapost.com/publications/article/113710/mag-bag-wal-mart-shrinks-magazine-racks.html

Target Makes a Scene with
Magazines
Youre going to buy just that ONE THING that you need, and
youre going to keep it cheap. As you leave the store, you
wonder how you dropped hundreds of dollars on things
that you didnt realize you needed until you walked into the
store. - Robert MacMillan (Reuters)
Target has moved magazines as their top priority in
impulse buying category.
Frontage magazine space has been increased to
accommodate more titles
Tie up with Zinio a digital publishing company.
Source: http://blogs.reuters.com/mediafile/2009/10/13/target-makes-the-scene-with-a-magazine/
Thank You