Why Target should worry
Remember those feature displays that used to clog the aisles at Walmart stores? The ones the company said it was eliminating as part of its wide-ranging Project Impact initiative. Well, Target’s arch rival followed through on that goal earlier this year, but almost as soon as Walmart had implemented its clean aisle policy the company reversed course and began selectively featuring such direct store delivery products as beverages and snacks on large displays in main store aisles.
The bad news for Target is the merchandising strategy enables Walmart to move large quantities of merchandise and disrupt marketplace demand by encouraging pantry loading. Target had a nice run in the food and consumables categories the past few years as it became more aggressive in promoting those categories. However, it didn’t hurt that as Target was attempting to re-establish pricing credibility vis-a-vis Walmart, its larger rival was shooting itself in the foot by shifting away from a key component of a longstanding merchandising strategy that had helped the company establish itself as the low-price leader. Walmart’s decision to selectively return feature displays to store aisles earlier this year may have began with chips and soda, but in recent weeks it has become evident that other products and categories, such as apparel, greeting cards, charcoal, entertainment and electronics have returned to aisle-oriented feature displays. Target is bound to feel an impact if Walmart regains some of the “promotional intensity” that chief merchandising officer John Fleming said the company lost when it cleared aisles.