How can Wal-Mart attract shoppers from one of the state’s wealthiest suburbs? With sushi bars, high-end electronics, and the illusion of elegance.
ERASE ANY DOUBT THAT YOU ARE being followed. Walk through the new Wal-Mart Supercenter in Plano, and eager, clean-cut men stare at you as if you were exotic prey. Will you inquire about the $2,984 one-carat diamond ring in the jewelry department? Will you linger over the $298 treadmill? Or will you just grab the two-for-$5 Slow Cooker Helper and dash for the checkout? The men in suits may ask if you are enjoying your “shopping experience.” But regardless of your answer, a sophisticated tracking system will report your purchases to Wal-Mart’s Arkansas headquarters, where some poor schlub will analyze the data and wonder where on earth the legacy of penny-pinching Sam Walton is headed.
This atypical Wal-Mart—which, nonetheless, has most of the same items as its regular stores—opened on March 22 on the far west side of town, shoehorned next to Costco and Home Depot and not far from Target. The store is unique; it’s a one-of-a-kind retail “laboratory” designed to lure the upper crust, and there’s no upper crust like Plano’s. Here in the Dallas über-suburb, where shoppers at one mall are greeted by doormen, the 223,000-square-foot Wal-Mart has been built out of light-brown brick to match the color of the surrounding maze of gigantic homes that begin at around $300,000.
Why rich folks, you ask?
Maybe you didn’t hear about the slump. Wal-Mart is no longer the country’s largest company, thanks in part to Exxon Mobil’s booming sales. But something else is giving Wal-Mart a migraine. It could be the 20 percent stock drop over the past two years. Or last November’s report of the smallest quarterly profit increase in four years. Or community opposition to stores in urban markets such as Chicago, Los Angeles, and New York, which rallied a war room of experts, including Robert McAdam, a former political strategist at the Tobacco Institute who oversees Wal-Mart’s corporate communications.
Wal-Mart even met opposition in Plano, an area not known as a bastion for hell-raisers, where a dozen homeowners’ associations formed the Good Neighbor Coalition to voice their concerns. Will the Wal-Mart look junky? they asked. Will it draw an unwanted “element” to the area? Irene Scherer, a former vice president of the Glen Heather homeowners’ association, said, “I don’t care if they make their store out of solid gold. It doesn’t change who Wal-Mart is.”
Yet Wal-Mart’s spokespeople say that some of these well-heeled residents will be drawn to the store. The company knows that wealthy people already shop at Wal-Mart, but they stick to buying groceries. Wal-Mart theorizes that if it can nudge those customers into the general-merchandise area, the retailer can retain global dominance. Since brand-new shoppers are increasingly difficult to bring in, Wal-Mart must dance with those loyal customers who brought them—and squeeze them.
Plano, it believes, is the perfect testing ground. In Texas, Wal-Mart ranks number one in market share among groceries. The company is celebrating its thirtieth anniversary here this year, and no state has more Wal-Marts and Sam’s Clubs. The Metroplex houses one of the greatest concentrations of Wal-Mart stores in the country: 104 locations (compare that with 84 in the entire state of Arizona). If Wal-Mart can make it here, Wal-Mart can make it anywhere. That was the reason the store’s first 24-hour pharmacy was tested in the Metroplex, along with Walmart.com’s site-to-store delivery service and the first “environmentally friendly” supercenter. As the mega-retailer prepares to up the ante, West Plano could change the landscape of the big-box wars.
ON A RECENT FRIDAY AFTERNOON, Gus Whitcomb, Wal-Mart’s regional spokesperson, served as a tour guide for the media through the new store. He spoke in perfect paragraphs, and, perhaps due to his confident bearing, he bore some physical resemblance to Simon Cowell, the American Idol judge. Unlike Simon, Gus is an undeniably positive person. He sprinkled the word “opportunity” into his pro-customer chorus throughout the tour. Shoppers may have “an opportunity to purchase something for their pet” or “the opportunity to select from a wide range of teas.” Employees may have “an opportunity, during a peak period and only a peak period, to bring an additional associate up so the cashier won’t need to bag.” Gus had heard a complaint from a seriously peeved woman that Plano shoppers expected quality service—and that included tag-team checkout. Gus evinced such reverence for “the customer”—nut job or no—that she seemed to take on mystical qualities. Rarely do the white-haired ladies in the laundry detergent section have such luster.
Even without a guide, losing one’s way would be impossible in this store. The aisles are wide enough to drive a Hummer through. Avocado-green signs in the grocery section delineate pork from seafood, and various shades of royal-blue signage guide shoppers through the general merchandise. (Smiley, Wal-Mart’s trademark yellow happy face, is noticeably absent; theories abound.) Most everything in the store is less than eight feet high so that the “Electronics” sign, for example, in the back of the store, can be seen clearly from the front entrance without towers of shoe boxes and laundry hampers blocking it. And some areas have been retired, including guns and ammo (Gus said the folks in West Plano aren’t big hunters), fabric (they don’t sew their own clothes), and layaway (they use cash or charge).
In their stead, Wal-Mart showcases sections such as wine to tempt the upscale customer—an experiment that results in an interesting juxtaposition of high and low culture. The $418.57 bottle of 2000 Grand Vin de Leoville du Marquis de Las Cases, Saint-Julien, found in the front section of the store on the faux-wood flooring among 1,200 other wine selections, stands near the big old 1.5 liter of Gallo and a series of “wines” that come in bright colors. Near a sushi bar, where, Gus pointed out, you can also find “the regular supply of things you’d find here from a seafood perspective,” a huge space dedicated to Pop-Tarts has its own classy-looking sign: “Toaster Pastries.” A dozen red roses with glitter-covered baby’s breath are held in a plastic wrap that reminds you, “Flowers make the difference,” for $16.97. Other curiosities include the Wi-Fi-enabled cafe and the women’s restrooms, which contain fake marble countertops, flowers, and a teeny potty for the youngsters.
Then there’s the organic-produce section, a ploy, one might guess, to lure away business from Whole Foods ($10 to anyone who has ever heard Gus utter those words in that sequence). There are, reportedly, five hundred organic items in this store, from produce to baby products. Wal-Mart spokeswoman Gail Lavielle later explained that “these products need to be democratized and made available at prices people can afford, because we think people want it and are going to want more of it.” No doubt the same democratic principle justifies a wide variety of corn dogs prominently displayed front and center in the display case of “Ready-to-Go Meals.”
This is not an either-or situation, however: Wal-Mart is not thinking you’ll buy either the corn dogs or the organic baby clothes. “You’ll see ads now,” Gus said, “where the customer says, ‘I went in for a tube of toothpaste and came out with a wide-screen television. I didn’t realize they had such great deals.’” Envision the shopping cart of Wal-Mart’s dreams: $1.98 toothpaste and a $3,477 plasma monitor, or a $2.98 hairbrush and a $329 Mongoose bicycle. On this Friday, a sampling of women in the store (almost all the shoppers were female) showed that they were open to the idea of buying pricier items at Wal-Mart. Still, the electronics and bicycle sections were populated mostly with associates.
For all the hubbub, though, this is the same old Wal-Mart; it just has softer edges. Fearing that loyal shoppers will feel abandoned when they hear about Plano’s experiment and wander over to Target, the company stresses that only 3 percent of the merchandise at the fancy Wal-Mart is unique to that location. The remaining 97 percent of the “shopping experience” is pure presentation. The associates have ditched the blue smock for khaki pants and a polo shirt, although they still avoid eye contact at all cost.
Yet some of these changes are already sending ripples throughout the retail world. For example, Gus said there are meetings under way, by people who probably get paid a whole lot of money, regarding the effects of Wal-Mart’s new LED lighting on the color and texture of packaging in the frozen food section. Also, he said as he pointed out the olive oil shelf, the company is testing new, darker displays. “Typically we have a white rack,” Gus said. “The white we had was a little bold, a little sharper, and this is more subtle. The customers said they responded well to this look.” One wonders if as much thought is put into Medicare prescription drug benefits.
And once the customer snakes through the grocery aisles, past the Eleona Extra Virgin Olive Oil for $14.68, the Tassos kalamatas for $3.82, the Starbucks whole beans for $6.98, past the Angel Soft toilet paper and the Carefree maxi pads, she arrives at the children’s clothing section, where the mary-kateandashley line of girls clothes is prominently displayed on the fake hardwoods. She needed the toilet paper; she may want some cute, inexpensive kids’ clothes. The suits stand with notebooks poised: Will she venture across the aisle?
If she does, the battle between the super discount stores takes a turn. Because this is where the all-important focus on the female shopper pays off. Affluent women, who account for money decisions in most families, have not bought Wal-Mart’s clothing in the past. In February of last year, the company determined that “fashion-forward, urban women” wouldn’t be caught dead in a Wal-Mart outfit. That discovery didn’t sit well with corporate. An entire office in New York, Gus said, was dedicated to “watch fashion trends from across the pond,” and by the fall of 2005, a new line called Metro 7 was in stores. The result? Jeans with gold paisleys painted on the sides run $24.94. A white tank top with a three-inch-wide metallic brooch sewed at the lowest point of the décolletage runs $14.94.
Women’s Fashions was devoid of shoppers on this particular Friday. But, as Gus pointed out, when Wal-Mart finally gets women to buy this stuff, they can purchase the items right in the section. An associate will even put them into a garment bag, which means that a pair of shorts doesn’t end up with the watermelons, the chocolate fondue fountain, and the Stairmaster.
FOR GUS, THE FEEDBACK ARRIVED CONSTANTLY. He didn’t need a notepad or a jacket and tie or an invitation. And yet: “You look like an Arkansas suit,” one shopper said to him. “Why don’t you have kosher packaged bologna?”
Gus was not thrown. “Hmm . . . well, we do have it in Dallas.”
“I don’t want to go to Dallas,” she said. Gus made a note and excused himself so that he might tell the manager what this mystifying creature wanted.
“They are not shy!” Gus admitted later. “Matter of fact, we were here on Monday with another group, giving a tour, and a customer came in and gave us a pretty good piece of her mind. While some folks might sit there and think, ‘Wow, that’s a negative reaction,’ it’s exactly what we want here. This is a retail lab. You’ve got to tell us what we’re doing right and what we’re doing wrong or we’re not going to get your business.”
So far, according to Wal-Mart, the store is going gangbusters. And though it may be a few months before this location has an effect on other Wal-Marts, the half-full parking lot of nice, if practical, cars is evidence that the company could be on to something. Just what that is may be difficult to decipher from comments alone.
“Where’s the colored water?” a woman asked.
“Colored water?” Gus replied.
“Y’all’s Wal-Mart water.”
Gus thought for a second. “Oh, right. This way,” and he disappeared, leading her down a new aisle where the familiar items were so neatly arranged and well lit they were almost unrecognizable.