By  on August 15, 2007

Powerful technology, the industry's most envied logistics and even last month's executive shuffles can go only so far toward getting Wal-Mart Stores Inc.'s fashion mix right.

So say industry sources, who claim there's more at play than merchandise that was too pricy, too soon — namely, the company's insular culture. Wal-Mart is known for superior technology — proprietary and internally developed — that has delivered great efficiency in the supply chain. However, fashion can't be scripted the same way as commodity items. Relying more on external trend data, the sort that helped Target Corp. and Kohl's Corp. get their formulas right, could also help Wal-Mart, but that would represent a shift for the world's largest retailer.

"They don't have strong knowledge about what happens with the competition and with consumers' mind-set," said Marshal Cohen, chief industry analyst at The NPD Group. "They rely solely on their internal information and logistical fortitude and that is two-thirds of their equation.

"They have to learn how to share [their data] and learn how to seek outside input and understand how to use that information to make calculated business decisions," he added.

While Wal-Mart has great volumes of information at its disposal — its database is said to be retail's largest — "The data only takes you so far," said Kathryn Cullen, vice president of Kurt Salmon Associates. "Then, the merchants have to translate that into: What is it we can effectively offer to the consumer, based on what we know they want?"

It's here, she said, that external sources of trend analysis should be brought into the equation to forecast demand and lift sales. Apparel and home sales lagged in Wal-Mart's namesake stores through July, when comparable-store sales rose 1.3 percent, and are expected to remain soft through the third quarter.

In June, Wal-Mart Stores Inc. president and chief executive officer H. Lee Scott Jr. told analysts that plans and new systems are in place to improve merchandising, particularly in apparel. Pressed for details, he declined to elaborate and a spokesman declined comment. "Combined with our expanding customer insights, we will improve our merchandising, community by community," Scott said. "You will also see better timing on our seasonal items, better depth of our products in apparel and greater clarity of offering in home."

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus