Walmart Sporting Goods Case Study

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Class project. Fall 2008.

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Walmart Sporting Goods Case Study

  1. 1. Walmart Sporting Goods<br />Case Study<br />November 4, 2008<br />MST Creative Group<br />Mariam Shahab<br />Shannon Reed<br />Taylor Foley<br />
  2. 2. Background<br /><ul><li> Walmart currently offers 12 different categories of sporting goods merchandise with 38 separate sub categories.
  3. 3. As the rise in importance of large sporting goods retailers has grown, Walmart is looking to be a relevant competitor in this industry.
  4. 4. Walmart is interested in gaining a better understanding of consumer motivations and behaviors with respect to its competitive set in the sporting goods industry.</li></li></ul><li>ResearchObjectives<br />Gain a better understanding of the marketplace dynamics overall for the sporting goods industry in terms of future trends and innovation. <br />How can Walmart tailor their sporting goods offering to better meet the needs of their current key target audience: families with kids? <br />Secondarily, for the next generation of 18+ individuals who are entering the market and setting up their own households, what common elements can Walmart leverage among this slightly younger target? What different needs does this target have that need to be addressed in order to place Walmart in their consideration set of alternatives for sporting goods? <br />
  5. 5. Methodology<br /><ul><li>25 email surveys
  6. 6. 9 Walmart store intercepts
  7. 7. 7 focus group participants
  8. 8. 3 in-depth interviews
  9. 9. Examined store layout</li></li></ul><li>Store Layout<br />Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169<br />
  10. 10. Store Layout<br />Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169<br />Photos taken on October 26, 2008<br />
  11. 11. Store Layout<br />Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169<br />Photos taken on October 26, 2008<br />
  12. 12. Store Layout<br />Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169<br />Photos taken on October 26, 2008<br />
  13. 13. Store Layout<br />Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169<br />Photos taken on October 26, 2008<br />
  14. 14. Store Layout<br />Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169<br />Photos taken on October 26, 2008<br />
  15. 15. Detailed Findings<br />Consumer Perceptions<br /><ul><li>Defining “sporting goods”
  16. 16. Current perceptions of Walmart
  17. 17. Where consumers buy sporting goods </li></ul>Consumer Habits<br /><ul><li> Frequency of sporting goods purchases
  18. 18. Importance of price when purchasing sporting goods
  19. 19. Importance of interactivity in a sporting goods department
  20. 20. Age differences in participation in sports and outdoor activities
  21. 21. Gender differences in sports and outdoor activities</li></ul>Consumer Wants<br /><ul><li>Ideal sporting goods store/department layouts
  22. 22. Insights from in-depth interviews</li></li></ul><li>Defining “Sporting Goods”<br /><ul><li> “Tools for an active lifestyle.”
  23. 23. “Anything you could possibly need to engage in sports activities, from different types of shoes and clothing to actual equipment.”
  24. 24. “Both traditional sporting products plus hunting and fighting products.”
  25. 25. “Goods and products used for the purpose of physical activity.” </li></ul>Key Insight: “Sporting goods” is difficult to define. <br />Quotes from email surveys, in-depth interviews and store intercepts. <br />
  26. 26. unamusing<br />Current Perceptions of Walmart<br />impersonal <br />low cost provider<br />worldly<br />unfriendly<br />versatile<br />busy hectic<br />convenient<br />out of shape<br />giant<br />affordable<br /> friendly<br /> easy<br />dirty bully<br /> ugly <br /> boring <br /> old <br />awesome mean<br />comfortable<br />cheap<br />treacherous<br />not durable<br />popular<br /> disorganized<br /> vast <br />good deal <br /> variety<br />dated<br />average quality goods<br />wise <br /> happy <br /> thrifty<br />big<br />no care quality<br />cultural low paying jobs<br />Words from email surveys, in-depth interviews, store intercepts and focus group. <br />
  27. 27. Current Perceptions of Walmart<br /><ul><li> Walmart consistently ranks lower on cleanliness and organization in relation to its’ competitors.1
  28. 28. Target and Dick’s Sporting Goods appeal to more affluent consumers. 2</li></ul>Key Insight: The common perception of Walmart and the quality of its’ products is negative. <br />1 Mintel, Mass Merchandisers-US- July 2008. Brand Analysis – Target.<br />2 Mintel, Mass Merchandisers-US- July 2008. Brand Analysis – Target.<br />
  29. 29. Where Consumers Buy Sporting Goods<br />Data from email surveys, in-depth interviews and focus group. <br />
  30. 30. Where Consumers Buy Sporting Goods<br /><ul><li> Women are 63% more likely then men to buy sporting goods at Target. 3
  31. 31. Men are 47% more likely to buy sporting goods at specialty stores. 4
  32. 32. 34% of men and 33% of women bought sporting goods at mass retailers in the last year. 5</li></ul>Key Insight: Consumers are more likely to purchase their sporting goods from mass retailers than specialty stores. Affluence plays a significant role in purchasing patterns. <br />3 Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.<br />4 Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.<br />5Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.<br />
  33. 33. Frequency of Sporting Goods Purchases <br />Data from email surveys, in-depth interviews and store intercepts. <br />
  34. 34. Frequency of Sporting Goods Purchases <br /><ul><li> “Good quality equipment doesn’t have to be replaced that often.”
  35. 35. “Only when a sports season changes or when a family member out grows something.”</li></ul>Key Insight: Consumers typically shop for sporting goods every few months, therefore, they want quality products that will last through the season. <br />Quotes from email surveys, in-depth interviews and store intercepts. <br />
  36. 36. Importance of price when purchasing sporting goods <br /><ul><li> “I don’t like to waste money on things I know I will ruin quickly, so inexpensive items are helpful. ”
  37. 37. “Price is a primary purchase decision criterion. The quality of an item is often related to its price.”
  38. 38. “The cheapest price isn’t always the best buy”
  39. 39. “I’ll pay anything to get a good quality product.”
  40. 40. “I shop for value.”</li></ul>Quotes from email surveys, in-depth interviews and store intercepts. <br />
  41. 41. Importance of price when purchasing sporting goods <br /><ul><li> Specialty stores draw people with higher income. 6</li></ul>Key Insight: Walmart is known for their cheap prices which is often associated with low quality products. <br />6 Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.<br />
  42. 42. Importance of interactivity in a sporting goods department<br /><ul><li> “My son likes to get the feel for a baseball glove since they all fit differently.”
  43. 43. “Interactivity allows me to determine quality level of the item”
  44. 44. “I want to know what I am buying before I have to return it.” </li></ul>Quotes from email surveys, in-depth interviews and store intercepts. <br />
  45. 45. Importance of interactivity in a sporting goods department<br /><ul><li> A majority of our respondents believed interactivity would add to their experience when purchasing sporting goods. </li></ul>Key Insight: Interactivity in sporting goods departments helps consumers make educated purchasing decisions. <br />
  46. 46. Age differences in participation in sports and outdoor activities<br />Data from email surveys, in-depth interviews, store intercepts and focus group. <br />
  47. 47. Age differences in participation in sports and outdoor activities<br /><ul><li> As people get older, they participate less in sporting activities (particularly around the age 45). 7</li></ul>Key Insight: Fitness and health are an emerging trend for both children and adults. This trend is affecting purchasing decisions for sporting goods.<br />7 Mintel, Leisure Activities of families-US-June 2005.Sports Recreation and Fitness.<br />
  48. 48. Gender differences in participation in sports and outdoor activities<br />Data from email surveys, in-depth interviews, store intercepts and focus group. <br />
  49. 49. Gender differences in participation in sports and outdoor activities<br /><ul><li> Men are more likely to participate in team sports, especially contact sports such as football and hockey. 8
  50. 50. Women do not play team sports with people they do not know. 9</li></ul>Key Insight: More men participate in competitive sports. <br />8 Mintel, Sporting Goods Team Sports-US-August 2008.Participation and Ownership.<br />9 Mintel, Sporting Goods Team Sports-US-August 2008. Attitudes and motivations.<br />
  51. 51. Ideal sporting goods store/department layouts<br />Drawings from focus group.<br />
  52. 52. Ideal sporting goods store/department layouts<br />Drawings from focus group.<br />
  53. 53. Ideal sporting goods store/department layouts<br />Drawings from focus group.<br />
  54. 54. Insight from in-depth interviews<br /><ul><li> Male, 18, high school student
  55. 55. Female, 46, working mother
  56. 56. Male, 30, independent bicycle store owner</li></li></ul><li>Additional Research<br /><ul><li> Swimming has the highest participation of any sports. 10
  57. 57. Hispanics purchasing power will increase by 48% by 2011. 11
  58. 58. Baby boomers are leaving team sports and buying at home fitness equipment. 12
  59. 59. Children cause elevated ownership of sporting goods. 13
  60. 60. Moms and grandparents buy children sporting goods. 14</li></ul>10 Mintel, Leisure Activities of families-US-June 2005.Sports Recreation and Fitness.<br />11 Mintel, Sporting Goods Team Sports-US-August 2008. Market Drivers.<br />12 Mintel, Sporting Goods Team Sports-US-August 2008. Market size and forecast.<br />13 Mintel, Sporting Goods Team Sports-US-August 2008.Participation and Ownership.<br />14 Mintel, Sporting Goods Team Sports-US-August 2008. It’s for the kids.<br />
  61. 61. Recommendations<br /><ul><li> Specific sport or outdoor activity labels
  62. 62. Increase product quality, while keeping price intact
  63. 63. Significantly increase the level of interactivity
  64. 64. Tout partnership with Gold’s Gym
  65. 65. Carry name brands
  66. 66. Provide athletic shoes
  67. 67. Advertise in parenting magazines
  68. 68. Sell seasonal equipment
  69. 69. Sell swimming accessories </li></li></ul><li>Thank you!<br />

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