Vijay's Target
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Transcript of Vijay's Target
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Presentation TitleSubtitle goes hereVijay Viswanathan
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Presentation Title alt coverSubtitle goes hereVijay Viswanathan
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Agenda
Current Scenario
Target Success Story
Wal-Mart Watch
Magazines
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Retail Sector
An estimated two-thirds of the U.S. gross domestic product(GDP) comes from retail consumption.Total retail sales in 2011 was $4.7 trillion an 8% increase over2010. (U.S. Commerce Department)
64% of consumers planned on spending less in the nation'sretail stores.Experts are estimating the after effects of the recession will lastfrom 18 months to 11 years.
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Retail Sector FactsFive of top 10 largest retailers are in US.
14.4 million people were employed in the U.S. RetailIndustry as of April, 2010.Retail technology - particularly the integration of internetshopping with mobile phone devices - will be the hottest
trend in the U.S. retail industry.Frugality and conscious consuming are expected tocontinue in U.S. retailing due to continuing highunemployment.
Greatest risks The two greatest risks indicated byrespondents to Aons 2011 Global Risk ManagementSurvey are economic slowdown and damage toreputation/brand.
Source: http://retailindustry.about.com/od/statisticsresearch/p/retailindustry.htm
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Risks in Retail
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Numbers
Wal-mart
Total Stores 3,898Discount stores (614)Supercenters (3,060)Supermarkets 1 (209)Small formats 2 (15)
Target
Total Stores 1,763General Merchandise(1512)
Supercenters (251)
Sams Clubs
Total Stores 612
Source: http://en.wikipedia.org/wiki/List_of_assets_owned_by_Walmart.http://media.corporate-
ir.net/media_files//IROL/65/65828/TGT/FY%202011_%20Historical%20Number%20of%20Stores.pdf
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Profiles
Median age of 40Median household income ofapproximately $64K
Approximately 43% havechildren at home
About 57% have completed
college
Median age of 44Median household income ofapproximately $40K
Approximately 40% havechildren at home
About 43% have completedcollege
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Target
Merchandising strategy
Private label goods
Clear customer (guest) target segmentFewer changes and continued strategy
Brand image of Hip, trendsetting big box store
Wealthier shoppers
Red Card and Red Channel
Source: http://classic.marshall.usc.edu/assets/080/16334.pdf
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Wal-Mart in Crisis..!
Same store sales flat liningBlame it on the weather?? Flopped Store remodeling project Failed attempt to attract upscale
customer Negative publicity Back fired emulation
Pr ice sens i t ive loya l cus tom ers
Source: http://walmartwatch.com/wp-content/blogs.dir/2/files/pdf/growth_rep ort
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Source:http://www.ftsmodules.com/public/texts/valuationtutor/VTchp3/topic8/topic8.htm
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Wal-Mart
During recession people preferred low cost Wal-
Mart stores.
Sales and stock prices started increasing.
46% of sales from grocery.
Source : http://eliteinsidetrader.com/2011/06/20/wal-mart-thrives-during-recession-whats-their-secret
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Target
Economic slowdown = Lesser sales in Target.
Only 20% sales preference lies in food and
grocery.
Unsuccessful credit card business.
Source: http://www.time.com/time/business/article/0,8599,1885133,00.html
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Wal-Mart Shrinks Magazine Racks
Wal-Mart has knocked magazines several rungs down onits hierarchy of sales priorities.
Decided to move magazine racks to the back of the store.
Magazine frontage display area to be reduced by half.
"Project Impact
Source: http://www.mediapost.com/publications/article/113710/mag-bag-wal-mart-shrinks-magazine-racks.html
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Target Makes a Scene withMagazines
Youre going to buy just that ONE THING that you need, andyoure going to keep it cheap. As you leave the store, youwonder how you dropped hundreds of dollars on thingsthat you didnt realize you needed until you walked into the
store. - Robert MacMillan (Reuters)Target has moved magazines as their top priority inimpulse buying category.Frontage magazine space has been increased to
accommodate more titlesTie up with Zinio a digital publishing company.
Source: http://blogs.reuters.com/mediafile/2009/10/13/target-makes-the-scene-with-a-magazine /
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Thank You