Everyone loves to hate Walmart, and yet the Goliath has always been the undisputed retail leader with unbeatable prices and customer base. But could that be changing?
New York-based Retail Eye Partners, an equity research and consulting firm, seems to think so.
A recent customer preference study by the company, which included an online survey of 400 women, concluded that consumers are now tipping their hats to Target for better prices. They are also rating Target higher for store experience.
Among other significant findings:
- More shoppers are shopping at Target this spring, and are shopping there more frequently than last year, especially compared to Walmart.
- While both Target and Walmart are seeing spending increases versus this time last year, Target's spending increases are outpacing those at Walmart.
- Walmart remains the undisputed leader in offering the best prices, sales and discounts, but Target continues to win this month on all other brand metrics.
" This Spring, shoppers feel there are significant improvements at Target on metrics like shopping experience, service, merchandise selection and merchandise quality – all elements of Target's "cheap chic" appeal and signs to us that shoppers, while still price sensitive, are looking more at the overall shopping experience this Spring versus just price," Retail Eye Partners said in an e-mail.
The company said that Target's upswing in consumer preference would boost its performance in 2010 as shoppers increasingly choose the retailer as their destination.
Richard Feinberg, consumer psychologist and professor in the Department of Consumer Sciences and Retailing at Purdue University, thinks the findings shouldn't cause Walmart any heartburn.
" Walmart is 410+ billion per year and 3700+ stores expanding significantly all over the world. Target is 70 billion and less than 1800 stores," Feinberg said in an e-mail. " Any increase for Target above what is happening for Walmart is because of their significantly smaller base ."
Target can't compete with Walmart on prices, and so it can't raid Walmart's base, Feinberg said, but it has been a formidable opponent in terms of store aesthetics, design and style.
The other area where Target is scoring is store locations, said Scott Testa, professor of business administration at Cabrini College.
"Walmart wants to be in the outskirts, where there's not a huge population density," Testa said in a phone interview. "Target is going where Walmart isn't -- more dense and urban locations."
But Target still has a long way to go before it can surpass its towering opponent that offers eye-popping deals. For now it seems to be putting up a good fight.
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