Wal-Mart vs. Target: Who's Winning the Battle for Cash?

Wal-Mart and Target continue to slug it out like retail behemoths battling to win customers that are essentially in full survival mode. While low price points play a significant role in winning over these cash-strapped consumers, other initiatives have been key in attracting new shoppers and propelling these retail giants towards future growth. Which retailer is winning the battle by attracting more of today's price-conscious consumers? RIS turned to leading industry experts and the blogosphere to weigh in.

"We are in a new world of consumer spending and I don't think living standards will ever be the same," says Howard Davidowitz, Chairman of Davidowitz & Associates. "Consumers are in full survival mode with today's consumer saving about 7 percent of what they make. Consumers are saving more than ever before, so retailers that offer the lowest price points will continue to win."

Strong Emphasis on Price Points
"Wal-Mart is perfectly well-positioned for this economy since it has a stronger price image based on its focus on food and consumables," says Davidowitz. "Wal-Mart has done a phenomenal job with pricing and its Super Centers. Its stores are winning across the board especially since it has the ability to sell food cheaply. Wal-Mart has also exploded its electronics department with increasing its brand offerings. Another important step Wal-Mart is taking is reducing its number of SKUS and suppliers and rolling out more private label brands. It has also faced monstrous worldwide business expansion especially with its growing presence in China, Mexico and Brazil. Overall, Wal-Mart is better positioned for the times we are in."

"Target has very few Super Centers and lower food penetration," adds Davidowitz. "Forty percent of its focus is on discretionary spending which includes apparel and home goods. Target has responded to today's market by cutting costs dramatically, increasing its penetration of foods and offering more private label. Where the retailer falls behind is its lack of an international presence."

"These two giant discounters are moving in opposite directions at this point in the downturn," says Aili McConnon, blogger for BusinessWeek "Wal-Mart is hoping to lure a more affluent consumer now and hopes they will stick around when the economy picks up. Target in contrast stumbled this past fall because it had more discretionary merchandise than Wal-Mart. Target is now making a big push into essentials through initiatives such as expanding its supermarket division in the hopes of capturing a more value-oriented shopper." For more on this Target vs. Wal-Mart blog, click here.

Online Conversion Battle Heats Up
What does the all important e-commerce space look like for Wal-Mart and Target? "Despite the slight lead in conversions, more Target customers abandon their carts than Wal-Mart shoppers," says Debra Miller, blogger for Compete. "Forty-seven percent of shoppers who begin checking out at Target do not complete their purchases, where as 35 percent of shoppers at Wal-Mart abandon their carts. Target leads in purchase rate and Wal-Mart boasts a smaller shopping cart abandonment rate. For more on Wal-Mart's and Target's online conversion data, click here.

Which retailer do you believe is winning the battle for more customers in this economy? Send us your comments by clicking here.