Wal-Mart Sharpens Its Fashion Focus

This year promises to be a landmark one for fashion at Wal-Mart Stores Inc. as the retailer executes an apparel strategy built on considerable market research and analysis.

Lucy Cindric, senior vice president of ladies apparel for Wal-Mart, shares some highlights about the firms fashion strategy and successes. APPAREL: The Metro 7 collection represents Wal-Marts first creation of a new brand. Can you tell us about the inception of the concept? Why did you decide to build a brand instead of acquiring one or pursuing an exclusive partnership with another national brand?

CINDRIC: We relied very heavily on market research that taught us about our customer and how she shops, which is primarily by wearing occasion. We profiled our current brands against our customer segments, and that told us that we had a void for what we call a contemporary missy brand. However, after our very intense market study, it came down to a realization that creating our own brand would be most meaningful for our customer. We did look at the possibility of buying an existing brand or using a name that we own as an option.

APPAREL: What does contemporary missy mean for Wal-Mart?

CINDRIC: Contemporary missy is a term we use to signify not only fast fashion but also a fast-turning product. The expectation is that our stores will turn Metro 7 product every six to eight weeks, which means new product on the floor more often. There will be less replenishment with this brand but more newness because the target customer is in our stores very frequently and is looking for new apparel items. Thats not necessarily how we have operated our apparel business. Weve had fashion, but our expectations previously have been for product to turn every eight to 10 weeks. Metro 7 is a much quicker-turning product.

APPAREL: Where is Wal-Mart with regard to the rollout of Metro 7, and how is it being received so far?

CINDRIC: We are very excited and more than pleased with the results of our initial launch of Metro 7 in 500 stores this past October, and we have promising expansion plans. As of this month, 860 stores will carry Metro 7, and then the next big rollout will be April 1, when well expand to 1,000 doors in missy. Well also have 860 doors carrying Metro 7 in plus sizes at that time. Also on April 1, well be launching Metro 7 shoes, accessories and jewelry to outfit the customer in total. By September, we expect to expand the brand to 1,500 doors in both missy and plus size.

APPAREL: So youve been pleased with sell-through and the consumers response to the line?

CINDRIC: Definitely. We initially marketed it to some of our bigger metro markets New York, Los Angeles, Chicago, Miami. And now were rolling it out to other markets to understand how big Metro 7s footprint can be in terms of the number of doors. This month well be testing in some rural markets, some college town stores and in different formats of stores within our Wal-Mart chain to understand the potential.

APPAREL: One of Wal-Marts major goals has been to more clearly define and differentiate its apparel brands to help customers make choices. What are some changes youve made to this end, and how has your apparel vendor community been involved?

CINDRIC: In our market research, we identified key customer segments and aligned our brands with each. Weve also redefined our brands to ensure brand clarity and focus in terms of our brand profile. We have shared that information with our brand teams, both internally and externally. Supplier training has been available to help our suppliers understand both the market segments and the brand profiles so that they are aligned with both. All of this has narrowed the focus on the brand, but streamlined it more toward the customer were trying to serve.

APPAREL: When it comes to your apparel selection, what is Wal-Marts vision for the optimal mix of in-house brands and national brands?

CINDRIC: Aligning our brands on the floor and clearly defining them are very important priorities. We value our national brands immensely. They provide us with leadership and price parity, which is part of our every-day-low-prices promise to our customers. Our mix is constantly changing, and we are letting our customers help us determine, based on their shopping habits, what ratios are correct for each market and store.

APPAREL: You say the mix could vary by store. That must present some major logistical challenges in terms of measuring and responding to customer shopping trends. Does Wal-Marts IT infrastructure help you look at trends by store to make educated decisions about the merchandise mix?

CINDRIC: You hit it right on. Our Information Systems Division (ISD) and our systems availability, which are really first class, give us the ability, even with the amount of stores that we have, to look at each store individually. Typically we use that information to look for ways to maximize our merchandise mix within groups of stores. We wouldnt necessarily look at every single store one at a time, but we would see how one store profile could marry with another store profile to allow us to maximize the opportunity within that grouping.

APPAREL: What is one of the most important findings from your consumer research and an example of one of the ways you have responded to it?

CINDRIC: Part of what weve learned is that the customer wants a clearly defined outfit and a reason to buy. We know that we have a strong basics following within Wal-Mart apparel, and our goal is to entice the customer to want to put more outfits together. Weve done a lot of training with our district fashion merchandisers and charged them with helping us merchandise the stores more clearly in order to show the customer more outfits and how to put ideas together. In addition to signage and adjacencies, we are also using hangtags to show our customer how to put outfits together.

APPAREL: How have consumers expectations changed about fashion, and how is Wal-Mart responding to this evolving shopper?

CINDRIC: Weve entered into marketing avenues that we havent pursued before. Weve advertised in Vogue for the first time, showing the customer that theres ample opportunity to mix and match. We know that customers arent only shopping one line as they have in the past. The customer is certainly open to shopping different avenues to put her outfits together. That has helped us in letting the customer know that we have more fashion and what we call price-relative value at Wal-Mart.

Also, the old mystique that a customer in the Midwest might not be as desirous of fashion as someone on the East Coast or West Coast is not the case today because of media and the Internet and computers. From the Wal-Mart perspective, that creates opportunity.

APPAREL: You opened a New York fashion trend office last year. How is this office developing?

CINDRIC: We have been very pleased by the decision to have a presence in New York, which is the pulse of the fashion market. The office is really our eyes and ears on what is happening. Having the office has been of particular benefit for us in identifying late-developing trends. Were also adding design to the office and will be significantly expanding our resources there to support all of our apparel and soft home brands.

APPAREL: There is a lot of focus on Metro 7, but George also is a major fashion initiative for Wal-Mart. Can you share a bit about your 2006 plans for George?

CINDRIC: From a volume perspective and in terms of Wal-Marts private brands, George is one of our largest initiatives across the store and across the company, not just in apparel. And we feel very, very good about the George initiative. This past July, we moved the George shop location to the front corner of our Wal-Mart stores to what we call a fast area. For example, if its a Wal-Mart superstore, George would be across from food because thats our highest traffic door in the store. We are looking at enhancing the shops. We have added black hangers to help identify that area a little more and are looking at other visual enhancements. The George product is modern classic, and we feel it has a big customer base thats already in our stores. Our No. 1 initiative for George, other than following the whole modern classic theme, is delivering a high level of quality. George was created out of our office in London, and we communicate quite a bit with that office to understand what is happening with trends.

APPAREL: Is there anything youd like to add about your fashion initiatives and what the market can expect to see this year?

CINDRIC: We have a lot of things on the burner, and I am confident the market will be pleased with a lot of the initiatives well be setting forth. We feel very good about where were headed in both female and male apparel. We know there is a customer who is shopping in our electronics department, our food aisles and our music section that has just not been in apparel yet. Its our goal to get her into our ladies department through these initiatives.

Kathleen DesMarteau is editor in chief of Apparel and can be reached at 864-627-0276 or [email protected].