Wal-Mart plans to customize stores

Wal-Mart Stores Inc. will retool its 3,256 U.S. stores over two years to give them a more customized mix of goods and layout for six key groups of customers, including Hispanics, African-Americans and affluent shoppers, the executive in charge of Wal-Mart’s U.S. operations said Thursday.

The move is the latest strategy twist for the world’s largest retailer as it struggles to revive growth rates that have fallen behind smaller rivals such as Target Corp. and after the company’s first quarterly drop in profits in a decade.

The approach, called segmentation, follows months of new initiatives from Wal-Mart to make sure each store is better tailored to its locale and to lure more affluent shoppers, who may come to Wal-Mart for groceries and basics but skip the company’s more profitable aisles like apparel and electronics.

Eduardo Castro-Wright, president and chief executive of Wal-Mart U.S., said stores will get a more specific mix of products and layout to appeal to one of the six target groups — based on what market research showed was the best approach for that location.

“Driving customer relevancy will drive growth,” Castro-Wright said in a Webcast of a presentation to financial analysts.

The target groups identified by Wal-Mart’s market researchers are Hispanics, African Americans, “empty-nesters/boomers,” affluent, suburban and rural shoppers, according to Castro-Wright’s slide presentation.

But he said the approach will not require changing more than a small part — about 3,000 — of the roughly 200,000 items sold by a typical Supercenter, the retailer’s largest stores that combine merchandise with a full grocery section.

And each demographic category will include hundreds of stores, so Wal-Mart will not be sacrificing the economies of scale that have allowed it to offer low prices, Castro-Wright said.

For now, Wal-Mart is testing the approach in 20 to 40 stores.