ANNUAL SHOPPER REVIEW: WALMART Robin Sherk Director, Retail Insights Rachel McGuire Senior Analyst November 2013

ANNUAL SHOPPER REVIEW: WALMART

Robin SherkDirector, Retail Insights

Rachel McGuireSenior Analyst

November 2013

© Copyright 2013 Kantar Retail

Copyright © 2013 Kantar Retail. All Rights Reserved.

501 Boylston Street, Suite 6101, Boston, MA 02116

(617) 912- 2828

[email protected]

No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photography, recording, or any information storage and retrieval system now known or to be invented, without the express written permission of Kantar Retail.

The printing of any copies for back up is also strictly prohibited.

Disclaimers

The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.

This seminar is not endorsed or otherwise supported by the management of any of the companies covered during the course of the workshop or within the following slides.


Executive Summary: Walmart Shopper ReviewSpending intentions have improved in 2013, though Walmart has not seen these gains translate into increased shopper traffic or basket.

Source: Kantar Retail analysis

Perceived price leadership is generally strong, as assortment refinement is an opportunity.

Neighborhood Market’s and Walmart.com’s shopper reach is mounting as the Supercenter’s penetration falls, despite its ongoing footprint expansion.

A sizable proportion of shoppers still feel pressured, as 31% continue to restrict their budgets, driving deal-seeking and trading-down behaviors. Conversely, value discounters and online-only retailers’ (i.e., Amazon.com) reach continues to expand, heightening competition with Walmart. Shifts to these channels also reflect Walmart shoppers’ eroding interest in a one-stop shop and rising attention to promotions.

While Walmart shoppers feel broadly satisfied with its low prices, the retailer faces greater rivalry for leadership in edible grocery versus other consumables categories. Many also feel that the product selection could be better tailored to their tastes, which supports the need for this continued area of focus at the retailer.

These new growth drivers speak to the importance of advancing Walmart’s multi-format “ecosystem.” In particular, defining Neighborhood Market’s trip mission as a complement to the Supercenter and encouraging website visit frequency will be key to rounding out shopper engagement across these platforms.

$


Table of Contents• Shopper Penetration

– Penetration by channel, banner– Demographic profile

• Shopper Motivations– Financial concerns– Spending intentions– Reasons to shop less– Motives to visit

• Shopping Behaviors– Trips, trip type, and baskets– Where else Walmart store shoppers shop

• Brand Position– Value demands and perceived price leadership– Perceptions of Walmart’s offer and position versus dollar

• Growth Platforms– Neighborhood Market – Online & mobile reach

4


Shopper Penetration

Walmart’s primary format is the Supercenter, and management continues to highlight its role as their primary growth vehicle. Although nearly 300 net Discount/Supercenters have been added since 2007, its reach with shoppers continues to decline.

5Source: Kantar Retail analysis

• Meanwhile, the shopper penetration at Neighborhood Market and Walmart.com continues to rise—underscoring the importance of these vehicles for driving new growth.

• Walmart’s shopper base skews toward lower-income, rural, and suburban families, though it has furthered its reach with upper-income shoppers and urban dwellers in the past five years.


Weekly Shopper Penetration Rate WanesWith the exception of value discounters and clubs, most channels have seen a noticeable long-term decline in their weekly shopper penetration rates.

Source: Kantar Retail ShopperScape®, October 2007, 2008, 2009, 2010, 2011, 2012, and 2013 6

Weekly shoppers, by channel2007-2013

PPD

Supermarkets -4.8

Convenience stores -9.3

Mass channel -1.8

Drug stores -2.3

Value discounters/dollar stores 1.7

Warehouse clubs -0.4

This movement indicates that shoppers are consolidating their range of store choices.

In particular, more are opting out of channels without strong value positions, as

convenience, supermarkets, and drug stores experienced the steepest declines.

This movement indicates that shoppers are consolidating their range of store choices.

In particular, more are opting out of channels without strong value positions, as

convenience, supermarkets, and drug stores experienced the steepest declines.

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, January 2007- October 2013 7

*Analysis for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of October 2013Data labels show format’s penetration during October of each year

Walmart’s Core Formats Also Attracting FewerDespite continued emphasis on Supercenters, its penetration has declined ~560 basis points since 2007. Meanwhile Walmart.com and Neighborhood Market are developing their reach.


Meanwhile, the Shopper Profile Is Shifting

All

Shoppers Monthly Walmart/WMSC Shoppers PPT Difference

Q3 2013 Q3 2013 Q3 2012 Q3 2007Q3 '13 vs.

Q3 '12Q3 '13 vs.

Q3 '07 Sample Size 12116 6531 6539 6921

Annual HH Income

<$25K 25% 27% 28% 30% -0.9 -3.1$25K - $49.9K 25% 28% 28% 29% -0.1 -0.6$50K - $74.9K 18% 18% 18% 18% -0.4 0.0$75K - $99.9K 11% 11% 10% 10% 0.2 0.5$100K+ 21% 17% 15% 13% 1.2 3.2

Kids in HHChildren under 19 at home 25% 28% 30% 32% -2.0 -4.1No children under 19 at home 75% 72% 70% 68% 2.0 4.1

Generation

Generation Y (born 1982 to 2002) 13% 13% 13% 8% 0.8 5.5Generation X (born 1965 to 1981) 31% 31% 32% 31% -1.0 -0.6Baby Boomers (born 1946 to 1964) 38% 38% 36% 38% 1.8 0.5Seniors (born before 1946) 18% 18% 19% 23% -1.5 -5.5

Hispanic Yes 13% 12% 11% 11% 0.9 1.2

Household Size

1 member 22% 19% 19% 24% 0.5 -5.02 members 37% 36% 36% 33% 0.0 2.93+ members 42% 45% 45% 43% -0.4 2.2

Home Ownership

Own or are buying 64% 64% 64% 67% 0.5 -2.6Rent 27% 27% 28% 25% -0.8 1.7Live with relatives (in their home) 6% 6% 5% 4% 0.5 1.8Other 1% 2% 2% 2% 0.0 -0.4

Pet Ownership

Net - Dog/Cat Owners 60% 63% 62% 59% 1.0 3.3Dog Owners 42% 46% 45% 43% 1.0 3.4Cat Owners 33% 36% 34% 35% 1.4 0.5No pets 40% 37% 38% 41% -1.0 -3.3

Market Size

Under 100,000 13% 18% 18% 18% -0.4 -0.3100,000 - 499,999 15% 19% 19% 19% -0.1 -0.8500,000 - 1,999,999 21% 23% 23% 24% -0.2 -1.32,000,000 or more 51% 41% 41% 39% 0.6 2.5

Noticeably, Walmart’s base is becoming relatively more affluent and younger. Fewer also have children, though Walmart still over-indexes versus all shoppers.

Source: Kantar Retail ShopperScape®, July-September 2007, 2012, and 2013 8

Note: Bolding highlighting indicates significant difference between time periods noted (95% confidence level)








9


Shopper Motivations

10Source: Kantar Retail analysis

• Walmart shoppers generally feel more comfortable with their financial situation, with near-term spending plans showing upward momentum in 2013.

• However, more are shopping less often at Walmart versus increasing their frequency. Reasons include the fact that some shoppers are still cutting back their spend, while others seek nicer shopping experiences.

• Those feeling increased budget pressures are more likely to trade down or look for deals versus change the retailers they frequent.

Walmart has faced challenges driving momentum in 2013, reporting negative comparable store sales in its fiscal Q1, Q2, and Q3. However, the sentiment among its shoppers has generally improved throughout the year.


Q3 2012 Q3 2013Job security

Much better/somewhat better off 20% 20%No change from last year 60% 62%Somewhat worse/much worse off 19% 18%

Household Income level Much better/somewhat better off 28% 28%No change from last year 45% 47%Somewhat worse/much worse off 27% 24%

Credit card debt Much better/somewhat better off 26% 26%No change from last year 55% 56%Somewhat worse/much worse off 20% 18%

Monthly mortgage/car payments Much better/somewhat better off 23% 22%No change from last year 64% 66%Somewhat worse/much worse off 13% 12%

Worth of investments Much better/somewhat better off 22% 26%No change from last year 55% 57%Somewhat worse/much worse off 23% 16%

Value of home Much better/somewhat better off 20% 28%No change from last year 56% 58%Somewhat worse/much worse off 24% 14%

11Source: Kantar Retail ShopperScape®, July-September 2012 and July-September 2013

Household Financial Health of Walmart Shoppers

Note: Shading indicates significant year-to-year difference (90% CL)

Those with assets arefeeling better about theirlonger-term investments.

Those with assets arefeeling better about theirlonger-term investments.

However, a sizeable minority still feels that its position

is deteriorating.

However, a sizeable minority still feels that its position

is deteriorating.

Financial Concerns Generally AbateWalmart shoppers’ sentiment is moderating versus last year, a disposition that is in line with all households.

© Copyright 2013 Kantar Retail 12Source: Kantar Retail ShopperScape®, January 2009–September 2013

Note: No significant differences between all shoppers and Walmart shoppers (90% confidence level)

Overall, Spending Plans Have ImprovedOn par with all shoppers, Walmart shoppers’ willingness to spend increased in 2013 to reach levels not seen in years. Though, 3 in 10 will still cut back.


Top Reasons Leading Those to Spend Less

Have Nots* Haves*

Rising food prices 51% 39%

Concerns about economy in general 41% 42%

Rising gasoline prices 45% 33%

Trying to simplify my life by buying fewer things 39% 35%

Household income is lower vs. last year 37% 32%

Saving more in general 34% 33%

Concerned political leaders won’t take action to keep economy healthy 25% 25%

Concerns about job security 17% 20%

Spending more on non-retail things (healthcare, education, etc.) 18% 16%

Concerns about the job market 14% 20%

Saving for a big purchase 7% 12%

Concerns about housing value/foreclosure 6% 7%

Concern about the cost of groceries and fuel are the top reasons why lower income, Have-Not shoppers are cutting back, whereas the more affluent Haves are more concerned about the economy.

Source: Kantar Retail ShopperScape®, September 2013 13

Walmart Shoppers’ Reasons for Spending Less at Retail(among past four-week Walmart/WMSC shoppers who said they planned to spend less at

retail in the coming month vs. the same time a year ago)

*”Have Nots” are those with an annual household income of less than $60k; “Haves” are those with an annual household income of $60k+.Green highlighting indicates a significant difference between Have Not vs. Have Walmart shoppers (95% confidence level)

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, February 2013 14

*”Have Nots” are those with an annual household income of less than $60k

Closer Look at Offsets to Budget PressuresThis year, increased payroll taxes and, more recently, reduced SNAP benefits added stress to many shoppers’ budgets. Initial feedback suggests that lower-income shoppers opted to curb spending over switching stores.

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape® May 2013 15

May 2012

May 2013

Just shopping less in general 48% 40%

Other retailers offer more pleasant shopping experience

22% 28%

Shopping other retailers more conveniently located 21% 25%

Can find better overall value at other retailers 20% 22%

Doing more shopping at supermarkets 24% 20%

Shopping more at retailers where can get in and out quickly

18% 18%

Doing more shopping at Target/SuperTarget 18% 18%

Doing more shopping at dollar stores 14% 14%

Doing more shopping at online-only retailers 9% 13%

Dividing shopping between more stores; doing less one-stop shopping

14% 12%

Doing more shopping at warehouse clubs 9% 9%

Reasons for Shopping Less Often at Walmart/Walmart Supercenter

Green highlighting indicates a statistically significant year-to-year difference (95% confidence level)

While Steady, 1 in 5 are Shopping Walmart LessImpacting traffic, more shoppers report reducing trips to the Discount stores/ Supercenters than increasing them. Many are doing so to limit spending, though more this year are citing interest in competitors with nicer experiences.

© Copyright 2013 Kantar Retail 16Source: Kantar Retail ShopperScape®, Feb/May/Aug 2007 and Feb/May/Aug 2013

Fewer Are Driven by the One-Stop AppealViewed long term, fewer Walmart shoppers are motivated by one-stop appeals. Instead, more are becoming driven by deals. Location, EDLP, and value remain the top drivers.








17


Shopping BehaviorsThis year, Walmart’s customer traffic has eroded slightly and average basket has been relatively flat. To shore up its position, the retailer has further asserted its price leadership, encouraged cross-box integration, and promoted stock-up savings events.

18Source: ECRM, Kantar Retail analysis

• Given that grocery is the primary trip driver and basket component, the retailer has further opportunity to convert sales in general merchandise categories.

• As Amazon.com continues to rise as a contender, shoring up overlapping categories (e.g., entertainment, apparel) while asserting Walmart’s differentiated offer (e.g., fresh, adult beverage) will become of increased importance.

© Copyright 2013 Kantar Retail 19Source: Kantar Retail ShopperScape®, Feb/May/Aug/Nov 2010 , 2011, and 2012; Feb/May/Aug 2013

Note: arrows indicate significant year-to-year difference from previous year (90% confidence level)

Trips to Walmart Edging Down RecentlyWhile still ahead of 2010 levels, self-reported trip frequency to Walmart is slowly decreasing as the channel average holds flat. Shoppers tend to visit Walmart roughly once a week, supporting its role as serving routine needs.


Trips Are Generally to Stock Up or Fill In

20

While stock-ups remain the most common reason to visit, roughly as many go to Walmart for fill-in or immediate use trips combined, indicating that the format continues to serve an array of destination needs.

Source: Kantar Retail ShopperScape®, Feb/May/Aug/Nov 2010 , 2011, and 2012; Feb/May/Aug 2013

Stock-up

Special occasion

Immediate use

Fill-in

Browsing

Buy coupon itemsBuy sale items

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, May 2013 21

Edible grocery itemsHH

essentialsHBCGeneral merchandise

88%88% 79%79%84%84%70%70%Conversion RateConversion Rate

Main Reason for Last Trip to Walmart Supercenter Was To Buy …

Highlighting the opportunity to support cross-box conversion from grocery to

general merchandise

Highlighting the opportunity to support cross-box conversion from grocery to

general merchandise

Trips Are Driven Largely by Edible GroceryGroceries and consumables drive a majority of trips to the Supercenter. Once in the store, many shoppers also browse general merchandise, though the general merchandise purchase conversation rate lags other areas of the box.

© Copyright 2013 Kantar Retail 22

$88$96

Source: Kantar Retail ShopperScape®, Feb/May/Aug/Nov 2010 , 2011, and 2012; Feb/May/Aug 2013

$101 $99

*Note: Last trip to Walmart/Walmart Supercenter for food, groceries, HBC products, or other household essentials

While the Basket Size Is Relatively FlatWith a basket ring roughly flat year-over-year, about three-fourths of grocery trip spending was dedicated to food and consumables.

© Copyright 2013 Kantar Retail 23Source: Kantar Retail ShopperScape®, January-September 2007 and 2013

Jan-Sept

2007Jan-Sept

2013PPD 2013 vs.

2007Amazon.com 24% 52% 27.6Target/SuperTarget 42% 40% -1.8Walgreens 38% 39% 1.2Dollar Tree n/a 34% n/aThe Home Depot 36% 33% -3.6Lowe's 32% 32% 0.6CVS/pharmacy 29% 32% 3.7Kohl's 25% 31% 5.6Dollar General 29% 30% 1.6JCPenney 32% 28% -4.0Kroger (all banners) 23% 24% 0.6Sam's Club 24% 22% -1.8eBay.com 24% 22% -2.0Family Dollar 21% 22% 0.5Best Buy 27% 21% -5.6Macy's 19% 19% 0.5Bath & Body Works n/a 19% n/aKmart/Big Kmart 23% 18% -5.1Barnes & Noble 20% 17% -2.9Bed Bath & Beyond 19% 17% -1.4PetSmart 16% 17% 1.4Staples 19% 17% -2.2ALDI n/a 16% n/aSears 20% 16% -3.7Michaels 17% 16% -0.7

Top 25 Retailers Cross-Shopped by Walmart/Walmart Supercenter Shoppers

While Amazon.com’s expanded reach is striking, there also were solid upticks in cross-

shopping at Kohl’s and CVS.

Note: Green highlighting indicates significant difference between column percentages (95% confidence level)

The steepest cross-shopping declines were at Best Buy,

Kmart, JCPenney, Sears, and The Home Depot.

The steepest cross-shopping declines were at Best Buy,

Kmart, JCPenney, Sears, and The Home Depot.

Amazon’s Cross-Shopping Reach Has DoubledMore than half of Walmart shoppers now also frequent Amazon.com, making this competitor far and away Walmart shoppers’ top cross-shopping destination.








24

© Copyright 2013 Kantar Retail 25Source: ECRM, Kantar Retail analysis

• Broadly, shoppers feel that Walmart is a strong price leader in the market, with particular strength in consumables.

• Conversely, Walmart’s shoppers see room for improvement in the assortment refinement and in-store experience.

• Compared with a competing low-priced channel, dollar stores, Walmart has an opportunity to help shoppers stick to their budgets and feel that they got a good deal.

Walmart’s brand cornerstone is to help shoppers save money. Today, shoppers value both spending as little as possible and getting a good deal.

Accordingly, Walmart has augmented its everyday low price assertions with price guarantees, lower opening price point items, coupons, and various savings events.

Brand Position

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, January 2013 26

Note: Arrows indicate significant difference between all shoppers and Walmart shoppers (95% confidence level)

One-stop shopping falls noticeably lower

on the list for both groups.

One-stop shopping falls noticeably lower

on the list for both groups.

Two Sides of Value of Top Concern to Shoppers Similar to all shoppers, Walmart’s audience is most focused on spending less and getting a good deal, with spending less a slightly higher priority.

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, November 2012

27

Accordingly, expect continued marketing

appeals around the low cost of its edible grocery offering.

Accordingly, expect continued marketing

appeals around the low cost of its edible grocery offering.

Also stiff competition from certain supermarkets for non-perishable grocery

Walmart’s Price Perception Is StrongWalmart is most commonly named the price leader across grocery and consumables categories. However, the retailer lagged supermarkets such as H-E-B and Publix in relation to fresh grocery.

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, May 2013

28

ExperiencePrice/Value Assortment

Anticipate continued focus on honing the grocery offer to local tastes, demands

Anticipate continued focus on honing the grocery offer to local tastes, demands

Consider clear, bold displays to aid its

positioning

Consider clear, bold displays to aid its

positioning

Conversely, Assortment Has Room to RefineWhile Walmart’s value is strong, the retailer’s biggest gaps for improvement pertain to the in-store experience and assortment selection.


91%

90%

81%

77%

57%

56%

47%

45%

9%

10%

19%

23%

43%

44%

53%

55%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Broad selection of national/name brands

High-quality private brands

Knowing that the items I need/want to buy will be in stock

Competitively priced private brands

Making me feel like I'm a "smart" shopper

Paying an everyday low price for items I need

Helping me stick to my budget

Feeling like I'm getting a "good deal"

Dollar Stores are Better Wallmart is Better

Source: Kantar Retail ShopperScape®, May 2013 29

Which is Better on the Following Factors: Walmart or Dollar Stores?(among shoppers who shopped both Walmart/Walmart Supercenter and a dollar store during the past four weeks)

Opportunity to use signage, rounded price points to help shoppers

budget at Walmart?

Opportunity to use signage, rounded price points to help shoppers

budget at Walmart?

Walmart vs. Dollar: Strength Relies on BrandsFor those looking for low price points, Walmart’s strength versus dollar stores is its broad offering of brands, in-stocks, and private label equity. Conversely, dollar stores are viewed as helping shoppers budget and get a good deal.








30


Growth Platforms

31Source: Kantar Retail research, store visits, analysis

Rolling out Neighborhood Markets and investing considerably in its digital presence, Walmart is building an ecosystem of formats and channels to reach its audience how ever they would like to shop.

• Neighborhood Market shoppers are as likely to make stock-up trips at the store as fill-in, highlighting opportunity to articulate the banner’s complementary role to the Supercenter as it expands in core Walmart markets.

• Reflective of the store locations, Neighborhood Market’s base also is slightly more urban. As these shoppers are introduced to Walmart, watch for opportunity to hook them into the retailer’s wider offering online.

• As the retailer develops its digital reach, a key opportunity is to support website trip frequency and convert its in-store shoppers. Also watch for opportunity to augment the Supercenter experience with mobile tools that offer specific utility.

© Copyright 2013 Kantar Retail 32Source: Kantar Retail ShopperScape®, January 2011 – September 2013, Kantar Retail analysis

Neighborhood Market’s Reach Is GrowingWith continued store expansion, this format now reaches across roughly half of the states. Accordingly, its shopper penetration has more than doubled since the start of 2011.


*in states where Neighborhood Market was present as of January 2011Bolding/highlighting indicates a significant difference between Walmart Supercenter and Neighborhood Market shoppers (95% confidence level)

Source: Kantar Retail ShopperScape®, January-September 2013

Walmart

SupercenterNeighborhood

Market

Annual HH Income

<$25K 29% 30%$25K - $49.9K 28% 27%$50K - $74.9K 18% 18%$75K - $99.9K 10% 9%$100K+ 16% 16%

Kids at Home Children under 19 at home 28% 29%

Generation

Generation Y (born 1982 to 2002) 14% 18%Generation X (born 1965 to 1981) 31% 36%Baby Boomers (born 1946 to 1964) 36% 29%Seniors (born before 1946) 19% 16%

Hispanic Yes 15% 21%

Locale

Rural 18% 8%Small Town 21% 11%Large Town 15% 16%Suburb/Commuter Town 37% 46%Urban/City 10% 18%

Demographic Profile of Past Four-Week Walmart Supercenter and Neighborhood Market Shoppers*

Note there is no difference in affluence

or presence of children, indicating that low price value

messaging and family appeals are just as

important to Neighborhood Market

shoppers.

Note there is no difference in affluence

or presence of children, indicating that low price value

messaging and family appeals are just as

important to Neighborhood Market

shoppers.

Shoppers Are More Urban, Hispanic & Younger Compared with Supercenters, Neighborhood Market attracts a more diverse and cosmopolitan crowd. Its wider reach with younger cohorts also suggests greater opportunity to interact with these shoppers via new media.

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, Aug/Nov 2012, Feb/May/Aug 2013 34

*Analysis for all three retailers limited to states in which Neighborhood Market was present as of October 2013

Given the trip types that each format serves, is Neighborhood

Market positioned to replace shoppers’ trips to dollar stores?

To the Supercenter?

Trips Are Divided Between Stock-Up and Fill-InWhile less of a stock-up destination than the Supercenter, Neighborhood Market balances to serve both grocery stock-ups and fill-in missions. In contrast, Dollar General’s position is clearly articulated as a fill-in destination.


$101

$89

Avg Trips per Month:Avg Trips per Month: 5.25.2 5.55.5

Source: Kantar Retail ShopperScape®, Aug/Nov 2012 and Feb/May/Aug 2013

Opportunity to aid assortment refinement in household essentials and

HBC, considering that Neighborhood Market

dedicates ample space to these areas

*Note: Analysis for all three banners is limited to states in which Neighborhood Market was present as of October 2013

The Basket Is Smaller, More Food FocusedRelative to Supercenters, Neighborhood Market’s basket is ~12% smaller, with a decreased emphasis of household items, consumables, and general merchandise. Its lower ring is partly offset by its higher trip frequency.


*in states where Neighborhood Market was present as of January 2011

Source: Kantar Retail ShopperScape®, January-September 2013, Kantar Retail analysis

Competitors that Neighborhood Market particularly overlaps

and over-indexes with:

% NM Shoppers Cross-Shopped Retailer

Index vs. All Shoppers

Walmart/WMSC 79% 105Walgreens 60% 144Amazon.com 56% 115Target/SuperTarget 52% 144CVS/pharmacy 46% 147Dollar Tree 43% 151Dollar General 43% 133The Home Depot 43% 138Lowe's 39% 121JCPenney 37% 148Family Dollar 37% 174Sub-Subnet - Kroger 36% 113Kohl's 34% 141Sam's Club 31% 141Best Buy 31% 162Macy's 30% 179eBay.com 28% 145Bed Bath & Beyond 27% 182Bath & Body Works 27% 1647-Eleven 25% 232Kmart/Big Kmart 25% 191Barnes & Noble 24% 159Big Lots 24% 196PetSmart 24% 144Office Depot 24% 186

Top 25 Retailers Cross-Shopped by Neighborhood Market Shoppers*

Cross-Shopping Across a Host of CompetitorsThe range of formats that Neighborhood Market shoppers also frequent indicates that this box serves as more of a complement than an anchor store.


48.1

58.2 57.4

84.9

98.6

128.9

37.7 36.8

38.4

0

20

40

60

80

100

120

140

160

Uni

que

Visi

tors

(in

mill

ions

)

Unique Website Visitors, MonthlyWalmart.com Amazon.com Target.com

37Source: Compete, Kantar Retail analysis

Unique Visits (YOY Growth Rate)Jul-13 Aug-13 Sep-13

Walmart.com 1% 3% -1%Amazon.com 38% 35% 31%Target.com 4% 7% 4%

Given that Walmart.com’s monthly growth rate has flattened recently, anticipate greater attention to supporting its presence and

promotions.

Assessing Walmart.com’s ReachWhile Walmart.com’s audience reach outpaces store-based contenders, such as Target.com, Amazon.com remains an accelerating leader in the channel.

© Copyright 2013 Kantar Retail 38Source: Kantar Retail ShopperScape®, July 2013; Kantar Retail analysis

21% 21%

8% 10%

22% 23%

12%15%

33% 32%

34%

40%

24% 23%

47%36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

All Shoppers Walmart Shoppers All Shoppers Walmart Shoppers

Amazon.com Walmart.com

Shopping Frequency on Walmart.com and Amazon.com

Never

Less than monthly

Monthly

Weekly

Also explore ways to help Walmart.com drive repeat trip frequency, as

relatively few are regular visitors

Also explore ways to help Walmart.com drive repeat trip frequency, as

relatively few are regular visitors

Opportunity to Convert Store ShoppersThough Walmart shoppers are just as likely to shop and buy online as others, they are much more likely to frequent Amazon.com than Walmart.com.

© Copyright 2013 Kantar RetailSource: Kantar Retail ShopperScape®, January-September 2013

39

All Walmart Shoppers

Walmart.com Shoppers

Annual HH Income

<$25K 27% 26%

$25K - $49.9K 27% 27%

$50K - $74.9K 18% 18%

$75K - $99.9K 11% 11%

$100K+ 17% 19%

Market Size

Non- MSA/ MSA <500K 34% 35%

MSA 500K - 1,999K 22% 22%

MSA 2M+ 43% 43%

Kids in HHChildren under 19 at home 28% 32%

No children under 19 at home 72% 68%

Cohort

Gen Y (1982 to 2002) 13% 17%

Gen X (1965 to 1981) 31% 34%

Boomers (1946 to 1964) 38% 37%

Seniors (born before 1946) 18% 12%

Hispanic Yes 12% 13%

Bolding/green highlighting indicates a significant difference between all Walmart Supercenter and Walmart.com shoppers (95% confidence level)

All Walmart Shoppers vs. Walmart.com ShoppersConsider targeting Walmart.com

appeals to these young families in-store by connecting to categories or

media that they particularly seek.

Consider targeting Walmart.com appeals to these young families in-store by connecting to categories or

media that they particularly seek.

Walmart.com Shoppers Are AttractiveRelative to all Walmart shoppers, Walmart.com’s shopper is younger and more likely to have kids. Contrary to popular stereotypes, they are not more affluent or urban, signifying that online appeals should be refined accordingly.


• Walmart.com cross-shopping down from 2007:

– eBay– Target.com– Category specialists

(e.g., Best Buy, Office Depot)

• Walmart.com cross-shopping up from 2007:

– Amazon.com– Department stores

(e.g., Macy’s, Kohl’s)– Lowe’s– Drugstores– Apple

40Source: Kantar Retail ShopperScape®, January- September 2007 and 2013, Kantar Retail analysis

Jan-Sept 2007

Jan-Sept 2013

PPD 2013 vs. 2007

Amazon.com 44% 73% 29.1eBay.com 43% 39% -4.3Target 36% 30% -5.9Best Buy 30% 24% -6.1JCPenney 25% 23% -1.8Kohl's 15% 22% 6.6The Home Depot 21% 21% 0.1Lowe's 17% 20% 3.2Sears 16% 16% 0.3Barnes & Noble 18% 16% -1.9Macy's 11% 16% 5.5Kmart 15% 13% -1.2Bed Bath & Beyond 13% 12% -0.2Staples 15% 12% -3.0Toys "R" Us 13% 12% -1.6Old Navy 13% 11% -1.0Walgreens 9% 11% 2.2Apple 5% 11% 5.4Bath & Body Works n/a 11% n/aSam's Club 10% 9% -1.0Zappos.com n/a 9% n/aVictoria's Secret/Pink 9% 8% -0.6CVS/pharmacy 7% 8% 1.4QVC 9% 8% -1.1Office Depot 15% 8% -6.9

Top 25 Retailers Cross-Shopped Online by Walmart.com Shoppers

Bolding/green highlighting indicates a significant year-to-year difference (95% confidence level)

Its Biggest Online Competitor Is Amazon.comThose shopping on Walmart.com are most likely to also shop Amazon.com, with eBay and Target.com falling behind as distant second and third choices.

© Copyright 2013 Kantar Retail 41Source: Kantar Retail ShopperScape,®, March 2013

Note: Boxes indicate activities in which Walmart shoppers are significantly more likely to engage vs. all shoppers (95% confidence level)

Given the popularity of these various

shopping activities, consider ways to

connect these actions to trip

planning for the Supercenter.

Given the popularity of these various

shopping activities, consider ways to

connect these actions to trip

planning for the Supercenter.

Online Is Also Enhancing the Store ExperienceWalmart shoppers are as likely as others to have a smartphone, enabling digital interactions in the store. The retailer’s shoppers are particularly likely to use their device to seek advice and search for coupons.


501 Boylston StreetSuite 6101Boston, MA02116

F +1 630 245 5647

www.KantarRetailiq.com

585 S. Front StreetSuite 50Columbus, OH43215

F +1 630 245 5647

www.KantarRetailiq.com

Robin Sherk

Director, Retail Insights

[email protected]

Rachel McGuire

Senior Analyst

[email protected]

Documents

ANNUAL SHOPPER REVIEW: WALMART Robin Sherk Director, Retail Insights Rachel McGuire Senior Analyst November 2013