Slow Back-to-School Season for both Wal-Mart and Target, but Strong in Electronics, Apparel

As economic woes seep out of the financial sector and gas prices shake consumer confidence, American shoppers are learning how to be bargain hunters. However, for Wal-Mart and Target, two of America’s most popular discount retailers, September sales fell short of expectations in a Back-to-School season that usually lifts the books. In the online world, last month was certainly a dismal one for growth as these retail giants maneuver for consumer attention. Target’s visitor traffic shrank by 6% and Wal-Mart’s 8% from August; and last September, Wal-Mart and Target were up 14% and 25% annually, while this year each crept upward a mere 5%. Since each site sees about the same amount of traffic, the competition happens at the on-site category-level.

For both, the Electronics category ranks atop the rest, but Wal-Mart electronics attracts a full two-thirds more people than Target. Scanning down the top-visited channels for Wal-Mart, it appears their emphasis is placed in technological gadgets, with TVs and video game departments two of the most popular. On the other hand, Target maintains an Apparel focus as Women, Baby and Children sections see the most visitors. At the same time, a battle for user engagement is championed by Wal-Mart, with nearly twice as many minutes spent per visitor than Target in every Top 10 category. Its TV section alone clocked in just under 4 minutes per user — apparently, people want to watch news of the latest economic downturn on a brand-new screen.

Seeking more than just ordinary visitors, though, retailers aim to attract those consumers with actual intent to purchase. To that end, site efficiency can be measured by the volume of purchasers funneled through the various shopping channels, and by the number of channels they eventually visit. Target does have an edge on channel exposure, with the average purchaser visiting about four categories, whereas Wal-Mart buyers visit only slightly more than two. If we break down each category again, this time by share of purchasers, we see a distinct change in the rankings.

Where Women and Baby remain at the top for Target, the Electronics category falls to the 10th spot, highlighting the fact that apparel-type channels are most successful for its online purchases. In fact, the top 3 channels attracting buyers are geared toward women, an important demographic for clothing merchandise. And though Wal-Mart purchasers are also likely to visit apparel sections, hi-tech channels such as electronics, video games and computers capture their interest as well — a stark contrast to those high-ranked channels on Target.

So where is the place for bargains? If you’re looking for the newest gadget, it’s likely you’ll visit Wal-Mart; need new shoes, Target may be what you’re after. With consumers less and less inclined to part with their money, expect both companies to capitalize on their most popular category of products.

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