Target and Wal-Mart Express Stores Comparison

Retailers have always had steep competition when it comes to prices. Grocers as well as clothing retailers are always keeping a close eye on their competitors prices to be sure they are offering the best deal for the customers. One way some retailers have been doing this is by opening up “express stores.” Macy’s was one of the first companies to take advantage of the outlet-style stores when it opened “Macy’s Backstage.” Other companies like Nordstrom, Walmart and Target have since followed.

Walmart and Target compete in more ways than one, and in recent years, it is more than just about where you can receive the best deal. Walmart made plans to open its first express market in 2011 in an effort to boost sales, but reports now state, despite their increase of smaller stores two years ago, the corporation will be closing all 102 of their Express stores across the United States this year. Conversely, Target CEO Brian Cornell plans to build smaller versions of the chain, with a handful already opened last year. Regardless of Walmart’s failures with these markets, there is still hope for success from Target’s attempts at this route. Why?

• Target’s brand is better suited for the urban markets than Walmart. Walmart’s format is still very much focused on a superstore mindset. The retailer wanted to offer the same deals and selection at the same price in a smaller arrangement, but it does not seem reasonable for the purpose of an express shop, which is meant for the quick shopper.
• Walmart apparently did not have a clear strategy, as many of their smaller stores were built in less populated areas, and these reduced versions of the big boxes obviously do not generate as much in sales, thus needing to depend on more foot traffic in order to even make ends meet.
• Target provides more merchandise such as clothes and home goods for sale where Walmart stocks its shelves with more groceries. Unfortunately for the Sam Walton company, this creates an inventory problem as perishable items are much more difficult to keep stocked.
• Target is looking to move some focus of its stores to act as mini-warehouses in order to fill purchases from online as well as considering partnering with some companies to do at-home deliveries.
• The red and white logo chain is learning from Walmart’s mistakes. Even though Walmart has more experience with this move to small stores in both years and numbers, Cornell is studying the faults and criticisms Walmart faced as he moves forward in his decision for these quick shops.

It will be interesting to see where the mini-Targets go, but according to the critics and numbers, it seems to be headed in the right direction. What are your thoughts on this move? Do you think that Target will make enough money from these mini stores to make a true difference in revenue? Other retailers may follow in their footsteps if it proves to be successful, which may change the face of the retail world forever.

Photo: Flickr: Mike Mozart