Walmart Sporting Goods Case Study

Walmart Sporting GoodsCase StudyNovember 4, 2008

MST Creative Group

Mariam ShahabShannon Reed

Taylor Foley

Background

• Walmart currently offers 12 different categories of sporting goods merchandise with 38 separate sub categories.

• As the rise in importance of large sporting goods retailers has grown, Walmart is looking to be a relevant competitor in this industry.

• Walmart is interested in gaining a better understanding of consumer motivations and behaviors with respect to its competitive set in the sporting goods industry.

Research Objectives1) Gain a better understanding of the marketplace

dynamics overall for the sporting goods industry in terms of future trends and innovation.

2) How can Walmart tailor their sporting goods offering to better meet the needs of their current key target audience: families with kids?

3) 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?

Methodology

• 25 email surveys • 9 Walmart store intercepts

• 7 focus group participants

• 3 in-depth interviews• Examined store layout

Store Layout

Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169

Store Layout

Walmart Store # 2341: 301 Falls Blvd Quincy, MA 02169Photos taken on October 26, 2008

Detailed FindingsConsumer Perceptions• Defining “sporting goods” • Current perceptions of Walmart• Where consumers buy sporting goods

Consumer Habits• Frequency of sporting goods purchases • Importance of price when purchasing sporting goods• Importance of interactivity in a sporting goods department• Age differences in participation in sports and outdoor

activities• Gender differences in sports and outdoor activities

Consumer Wants• Ideal sporting goods store/department layouts• Insights from in-depth interviews

Defining “Sporting Goods”• “Tools for an active lifestyle.”

• “Anything you could possibly need to engage in sports activities, from different types of shoes and clothing to actual equipment.”

• “Both traditional sporting products plus hunting and fighting products.”

• “Goods and products used for the purpose of physical activity.”

Key Insight: “Sporting goods” is difficult to define.

Quotes from email surveys, in-depth interviews and store intercepts.

Current Perceptions of Walmart

cheapcomfortable

convenient

big

affordable friendly easy

popular disorganized vast

good deal varietydated

dirty bully ugly

boring old awesome mean

wise happy thrifty

busy hectic

impersonal versatile

treacherous

cultural low paying jobs

low cost providerworldly

out of shape

unfriendly

no care

quality

unamusin

g

giant

average quality goods

not durable

Words from email surveys, in-depth interviews, store intercepts and focus group.

Key Insight: The common perception of Walmart and the quality of its’ products is negative.

• Walmart consistently ranks lower on cleanliness and organization in relation to its’ competitors.1

• Target and Dick’s Sporting Goods appeal to more affluent consumers. 2

Current Perceptions of Walmart

1 Mintel, Mass Merchandisers-US- July 2008. Brand Analysis – Target.2 Mintel, Mass Merchandisers-US- July 2008. Brand Analysis – Target.

Where Consumers Buy Sporting Goods

Dick's Sporting Goods

REI

EMS

Academy

Olympia Sports

Whole sale store

Walmart

Target

Other

Data from email surveys, in-depth interviews and focus group.

Where Consumers Buy Sporting Goods• Women are 63% more likely then men to buy

sporting goods at Target. 3

• Men are 47% more likely to buy sporting goods at specialty stores. 4

• 34% of men and 33% of women bought sporting goods at mass retailers in the last year. 5

3 Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.4 Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.5 Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.

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.

Frequency of Sporting Goods Purchases

Weekly Monthly Every few months Once a year Other0

2

4

6

8

10

12

Data from email surveys, in-depth interviews and store intercepts.

• “Good quality equipment doesn’t have to be replaced that often.”

• “Only when a sports season changes or when a family member out grows something.”

Key Insight: Consumers typically shop for sporting goods every few months, therefore, they want quality products that will last through the season.

Frequency of Sporting Goods Purchases


Importance of price when purchasing sporting goods • “I don’t like to waste money on things I know I will

ruin quickly, so inexpensive items are helpful. ”

• “Price is a primary purchase decision criterion. The quality of an item is often related to its price.”

• “The cheapest price isn’t always the best buy”

• “I’ll pay anything to get a good quality product.”

• “I shop for value.”


Importance of price when purchasing sporting goods

• Specialty stores draw people with higher income. 6

6 Mintel, Sporting Goods Team Sports-US-August 2008. Retail Channels.

Key Insight: Walmart is known for their cheap prices which is often associated with low quality products.

Importance of interactivity in a sporting goods department

• “My son likes to get the feel for a baseball glove since they all fit differently.”

• “Interactivity allows me to determine quality level of the item”

• “I want to know what I am buying before I have to return it.”


Importance of interactivity in a sporting goods department

• A majority of our respondents believed interactivity would add to their experience when purchasing sporting goods.

Key Insight: Interactivity in sporting goods departments helps consumers make educated purchasing decisions.

Age differences in participation in sports and outdoor activities

Adults ChildrenBasketball 2 4Baseball 1 1Football 1 2Hockey 0 1Soccer 4 9Golf 3 6Lacrosse 0 4Volleyball 2 2Softball 0 2Swimming 1 3Working out at the gym 20 13Working out at home 15 7Yoga 8 5Other 6 5

Adults Children

Camping 8 4

Canoeing 3 6

Kayaking 5 7

Running/Jogging 13 9

Walking 26 9

Hunting 0 1

Snowboarding 3 3

Skiing 12 13

Fishing 4 8

Boating 4 6

Cycling 10 7

Other 4 2

Data from email surveys, in-depth interviews, store intercepts and focus group.

Age differences in participation in sports and outdoor activities

• As people get older, they participate less in sporting activities (particularly around the age 45). 7

7 Mintel, Leisure Activities of families-US-June 2005.Sports Recreation and Fitness.

Key Insight: Fitness and health are an emerging trend for both children and adults. This trend is affecting purchasing decisions for sporting goods.

Gender differences in participation in sports and outdoor activities

Male FemaleBasketball 1 1Baseball 1 0Football 1 0Hockey 0 0Soccer 1 3Golf 3 0Lacrosse 0 0Volleyball 0 2Softball 0 0Swimming 0 1Working out at the gym

6 14

Working out at home 6 9Yoga 1 7Other 1 5

Male Female

Camping 3 5

Canoeing 3 0

Kayaking 3 2

Running/Jogging 4 9

Walking 5 21

Hunting 0 0

Snowboarding 0 3

Skiing 4 8

Fishing 3 1

Boating 3 1

Cycling 4 6

Other 1 3

Data from email surveys, in-depth interviews, store intercepts and focus group.

Gender differences in participation in sports and outdoor activities• Men are more likely to participate in team sports,

especially contact sports such as football and hockey. 8

• Women do not play team sports with people they do not know. 9

8 Mintel, Sporting Goods Team Sports-US-August 2008.Participation and Ownership.9 Mintel, Sporting Goods Team Sports-US-August 2008. Attitudes and motivations.

Key Insight: More men participate in competitive sports.

Ideal sporting goods store/department layouts

Drawings from focus group.

Insight from in-depth interviews

• Male, 18, high school student • Female, 46, working mother • Male, 30, independent bicycle store owner

Additional Research• Swimming has the highest participation of any

sports. 10

• Hispanics purchasing power will increase by 48% by 2011. 11

• Baby boomers are leaving team sports and buying at home fitness equipment. 12

• Children cause elevated ownership of sporting goods. 13

• Moms and grandparents buy children sporting goods. 14

10 Mintel, Leisure Activities of families-US-June 2005.Sports Recreation and Fitness.11 Mintel, Sporting Goods Team Sports-US-August 2008. Market Drivers.

12 Mintel, Sporting Goods Team Sports-US-August 2008. Market size and forecast.13 Mintel, Sporting Goods Team Sports-US-August 2008.Participation and Ownership.14 Mintel, Sporting Goods Team Sports-US-August 2008. It’s for the kids.

Recommendations• Specific sport or outdoor activity labels• Increase product quality, while keeping price

intact • Significantly increase the level of interactivity • Tout partnership with Gold’s Gym• Carry name brands• Provide athletic shoes • Advertise in parenting magazines • Sell seasonal equipment • Sell swimming accessories

Thank you!

Walmart Sporting Goods Case Study

Business

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