The Differences Between Target America and Wal-Mart America

2/17/09
The Differences Between Target America and Wal-Mart America
by Dante Chinni, a veteran political reporter also directs the Patchwork Nation project hosted at the Christian Science Monitor.

As the economy continues on what appears to be a downward trajectory, the American public will almost certainly be spending more time visiting bargain retailers. But when they do, they will not be going to the same chain stores.

There is a retail divide in America, and it is very visible among Patchwork Nation’s community types, according to an analysis of a postelection poll from Zogby International about store preferences. Specifically, the analysis shows a fairly clear demarcation between might be called Wal-Mart America and Target America.

Target wins in more affluent areas, Wal-Mart in rural and small- to mid-sized-town areas, writes Patchwork Nation consultant James Gimpel, a professor of government and politics at the University of Maryland, in an e-mail. Even if the retailers are dominant in different places, Target and Wal-Mart seem to be in close competition, Professor Gimpel says.

In fact, for all the economic indicators that already exist, one of the best to watch in 2009 may be a Wal-Mart/Target index.

A tough market

No doubt, this economy has posed challenges not only for consumers, but also for businesses. In January, all the big retailers, Target included, reported that sales declined when compared with January 2008. That is, all except for Wal-Mart: It posted a 2.1 percent gain.

To a certain extent, the Zogby survey also shows customers buying into Wal-Mart. Survey participants were asked which retailer they would choose if they could shop at only one chain store for the rest of their lives. In nine of Patchwork Nations 11 community types, at least 20 percent of respondents chose Wal-Mart. Target, meanwhile, garnered at least 20 percent of the votes in only six community types.

But a side-by-side comparison of Target and Wal-Mart in each community type reveals other important findings. People in Patchwork Nation’s three most populous community types - the wealthy Monied Burbs, the big-city Industrial Metropolis, and the growing Boom Towns- overall chose Target as their only store for the rest of their lives. People in the collegiate Campus and Careers community type also picked Target. These four community types are wealthier and more urban.

The other seven community types - which are small-town and more rural - went for Wal-Mart.

Do these different choices reflect different priorities in the community types? For example, is there a focus on style in the places that chose Target, which tries to burnish a hipper image in its ads? Or do Wal-Mart communities have a greater focus on thrift? The picture is a bit complicated.

Where the Wal-Marts are

First, as we’ve noted before, the same stores are not available to everyone, at least not in the same number.

For instance, it’s fair to say that some parts of the US might be called Wal-Mart America simply because the Arkansas-based giant has chosen to locate more stores in those kinds of places.

In December, we noted that Wal-Mart had placed the largest number of stores in the Monied Burbs - the most populous of our 11 community types. But if you are looking at per capita figures, the less-wealthy and aging Emptying Nest counties have the greatest number of Wal-Marts - 2.4 stores for every 100,000 people.

The residents in Emptying Nestsseem to appreciate having Sam Walton’s megastores nearby. Thirty-seven percent of them chose Wal-Mart if they had only one store to shop in for the rest of their lives.

But there’s more to the numbers than simple availability. For instance, although a lot of Wal-Marts are located in Monied Burbcounties, the residents there tend to favor Target and tend to disfavor Wal-Mart. In a separate question in the Zogby poll, almost one-quarter of people in the Monied Burbs say they never shop at Wal-Mart.

There’s also more to the Wal-Mart/Target differences than simple income. While in most of the places that favor Target residents tend to make above the median household income, this doesn’t hold everywhere. Many in our culturally conservative Evangelical Epicenters earn slightly more than average overall, but this community type favors Wal-Mart by a large margin. And our collegiate Campus and Careers counties earn less than average, but favor Target slightly.

The strategy in these times

What’s clear from this discussion is that a variety of socioeconomic and cultural factors go into shaping the different clienteles for Wal-Mart and Target. Thus, maybe there is something to the idea of Wal-Mart America and Target America. This, in the end, is the premise of marketing.

But even if each retailer is going after certain demographics, both chains are also interested in gaining a greater market share.

Consider Wal-Mart and the lower readings it received in the Zogby poll from those in the Monied Burbs, Boom Towns, and Industrial Metropolis. It seems to be aware of its challenges in these communities, and in the past year, it has shifted its marketing from Always Low Prices to Save money. Live better a more lifestyle-oriented slogan. The new marketing suggests that there may be more to life than low prices, but that low prices can improve life.

Then again, there may come a point when America’s economic hardship deepens to the point where some of these differences begin to disintegrate. And it appears that Wal-Mart may benefit.

Why? Style and cheap chic are nice, but when times are tough, it may be that price trumps all. Even hard-core, culturally based shopper loyalty may have its limits.