NEW YORK — Wal-Mart rolled out a new customized store in New Jersey on Monday that targets two consumer segments.
The 143,000-square-foot unit in Kearny, N.J., about 15 miles west of Manhattan, is intended to appeal to Hispanics and lure New Yorkers, who don't have a Wal-Mart of their own in the five boroughs.
The store is in a former industrial zone designated by the state of New Jersey as an urban enterprise zone, meaning consumers will pay 3 percent sales tax instead of 6 percent.
The world's largest retailer, based in Bentonville, Ark., has designated the Kearny unit a "store of the community," which means it has been micro merchandised to reflect the needs and tastes of local residents. Wal-Mart is using more sophisticated consumer research that allows it to tailor assortments for many of its 5,447 U.S. stores.
Wal-Mart's president and chief executive officer, H. Lee Scott Jr., has said tapping into the growing Hispanic market is a priority for the $312 billion company. Hispanics are projected to have $1 trillion, or 10 percent, of the U.S. buying power by 2010, and $2 trillion by 2020, and represent a major business opportunity.
"This community is over 30 percent Hispanic," said Jerry Herrin, Wal-Mart's regional market manager, pointing to cans of Goya food products.
Signage is in English and Spanish and there is an entire aisle of ethnic food products, a Hispanic book section, an expanded selection of Latin music and hair color and hair-relaxing products popular with this audience.
Herrin pointed out a brand of hosiery the company discovered called "On the Go" that "reaches out to African-American and Hispanic customers," he said. "It's a huge success."
As Wal-Mart seeks to appeal to Hispanic shoppers, executives have rolled out the red carpet for shoppers from New York. Herrin said he expects a large contingent of New York customers, and the store is prepared to receive them with a large assortment of fashion and accessories.
"We get a lot of tourists staying at the hotels in Secaucus, [N.J.] — New Yorkers and Hudson County residents," Herrin said. "We're close to the Holland and Lincoln tunnels. We have a customer in the metropolitan New York area that understands fashion."A Wal-Mart unit in Secaucus is the number-one store in the company for Metro 7, the brand of trendy apparel launched in October.
"That's huge," said Ed Stephens, the company's fashion market merchandiser.
Metro 7 merchandise occupies three racks, which soon will grow to nine. A women's lace bed jacket sells for $19.94 and sequin-waisted pants for $19.94. The brand's accessories feature costume jewelry, including a triple-strand charm necklace for $16.92 and a sequined belt for $9.88. In addition, there were hoop and chandelier earrings and handbags in styles such as hobos and bucket bags.
"If a brand is effective and you treat it right, you can expand it in other parts of the store," Stephens said. "We're working all together. You have shoes and jewelry working with the apparel brands and tying things together."
If the Secaucus store is any indication, George organic baby clothing will be in high demand. Stephens said the organic line is being expanded.
The Kearny store also is bullish on George. Next month, George ME by Mark Eisen, a capsule collection launched in the U.K., will arrive at the store. The 35-piece line will be updated every 90 days. A George tribal-print skirt was $14.57 and a one-button cardigan was $16.57. Stephens looked at the color-coordinated items and said: "A few years ago, you wouldn't have had this from Wal-Mart."
A few years ago, wood floors and tables wouldn't have been seen at Wal-Mart, either. Now there's more image signage and fewer price placards. "The fashion will sell to the customer first, then they'll look at the price," Stephens said. "When they see the value, it will push them over the edge."
There's an overall effort throughout to improve the shopping experience. The store feels spacious, with wide aisles and clear sight lines. Energy-efficient fluorescent lighting adjusts to outside light, which streams into the store through skylights, and concrete floors the color of cappuccino are softer on the eyes and feet. In a few months, waterfall fixtures that show complete outfits will arrive.
Risers or overheads with products piled up to the ceiling have been eliminated and benches have been strategically placed in several departments to give shoppers a chance to rest. The look of displays has been upgraded, from the mahogany-colored fake wood greeting card unit that looks like a piece of furniture, to the blond wood paint chip dispenser and stainless steel paint mixing counter.The store has other bells and whistles, including a portrait studio, a vision center, a National Hearing Center outlet, Subway fast food and a tire and lube express. A money services center express kiosk allows shoppers to pay bills, cash payroll checks, purchase money orders and withdraw funds using the no-fee ATM.
During a tour of the store, Herrin showed off the "alternative furniture," which included the Urban Lane collection of sleek dark pieces as well as modern rocking chairs and a brentwood chair. "That reminds me of a Pottery Barn chair," he said of the latter. "There's this whole home-design, company-wide initiative."
Behind the furniture, images on flat-screen TVs appeared along one wall. There were iPods arrayed at the front of the department.
"Electronics is a very significant change for the organization," Herrin said. "You see the display of iPods, MP3 players and portable DVD players — there's a sense of technology we never had before."
Herrin displayed his knowledge of the local market and the Kearny store's merchandise, which features more than 120,000 products, when he stopped at a large bin.
"We would go into local competitors and see what they're doing and I would never see a whole display of puppy pads, like this," he said.
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