Walmart (NYSE:WMT) has gone all in on the holiday season, making Black Friday a five-day event.
In addition to expanding the shopping event from parts of Thursday and all of Friday to a nearly week-long affair the chain has ramped up its online efforts, gotten even more aggressive on pricing, and expanded its already massive selection. The company explained parts of its strategy in a press release:
Compared to 2013, Walmart has lowered the prices on popular Black Friday items. For example, last year a Vizio 60" Smart TV sold for $688. This year a 65" Vizio Smart TV will be available for $648 as part of Walmart's 1-Hour Guarantee. The Xbox One, available last year for $499, will be sold this year as a bundle for $329 with a $30 Walmart Gift Card and is another 1-Hour Guarantee item.
The 1-Hour Guarantee is a Walmart invention which eliminates some of the fighting over items that characterized previous Black Fridays. When the stores open at 6 p.m. on Thanksgiving, customers will be able to move to a designated area of the store by 7 p.m. to pick out an item they want from a list of deals. If the item is still in stock the customer can take it home. If it isn't he or she can still buy it and arrange for it to be shipped to a store at a later date. This takes some of the inventory guessing out of the process for the chain while also guaranteeing a positive experience for the customer.
You may not leave with the item in hand, but you'll at least know you will have it in time for Christmas. And, since you're already in the store in the early evening on the day that kicks off the holiday shopping season, why not get some more shopping done? Walmart brings you in with the huge deal and likely keeps you shopping with lesser deals combined with the retail enthusiasm and lack of good judgment that a hoard of shoppers seems to produce.
Clearly the retailer is making an aggressive push for Black Friday and it has good reason to do so.
Target is still reeling and Wal-Mart can permanently steal some customers
Target (NYSE:TGT) has yet to fully recover from the data breach that occurred during last year's holiday shopping season. In that attack, the company said personal information from up to 70 million customers was compromised, The Wall Street Journal . The breach, which ran from Nov. 27 through Dec. 15, involved malicious software installed in the system where cards are swiped at cash registers. That attack has shaken consumer confidence in Target and was part of the reason its then CEO Greg Steinhafel was fired. This has opened a door for competitors to step in.
Though Target has been making aggressive efforts to win back customers, a research study from Retail Perceptions shows that earning back trust after a data breach can be an uphill challenge.
"Based on original research, our study found that 12% of shoppers would stop shopping at a retailer hit with a breach, while a staggering 79%of shoppers who do return prefer to use cash as a method of payment as opposed to using credit or debit cards," according to the report. "More importantly, we discovered that it is possible for retailers to regain the trust of most shoppers after data exposure, but not before coming clean about the incident and being specific about what changes were made to prevent it in the future."
Target has come clean and it has made changes, but the initial handling of the crisis was poor. That may give Walmart a chance to use this holiday season to kick its competitor while down and win some long-term customers.
Walmart has improved its online store to compete with Amazon
Walmart made it very clear earlier this month it views Amazon (NASDAQ:AMZN) as a major competitor -- it publicly announced its stores would match the online retailer's prices.
In addition to price matching in its stores, the company has also taken steps to match its rival online.
In August, Walmart launched a redesign of Walmart.com aimed at creating a better experience for mobile users. The company has also worked hard to take advantage of the fact that it has something Amazon does not, physical stores. Walmart.com now offers extensive tools that enhance the relationship between its brick and mortar stores and its digital one. This includes interactive maps which show where in each store various Black Friday items are being offered.
Walmart has also made its website a key part of its Black Friday strategy. Its physical stores don't open until 6 p.m., but the savings actually start online Thanksgiving morning.