Walmart Annual Shopper Review

Walmart Annual Shopper Review
January 2015

Copyright © 2015 Kantar Retail. All Rights Reserved.
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Executive Summary: Walmart Shopper Review
Shoppers’ preference for Walmart’s core format continues to decline. Shoppers are visiting the Supercenter less frequently and spending slightly less on each trip, even as they feel they are on relatively steady financial footing overall. As the Walmart shopper base shifts younger and toward smaller households, finding new ways to engage shoppers and to drive traffic—especially beyond edible grocery trips—will be essential. Perceptions of Walmart’s value proposition remain consistent. Seeking out low prices and finding good deals continue to be the top priorities of Walmart’s core shopper. However, as shoppers also value pleasant shopping experiences, the retailer has ground to make up in specific areas, such as the quality of its fresh assortment as well as its ability to execute basic aspects of the in-store experience such as maintaining in-stock position. Neighborhood Market penetration is growing, but the format still needs work. The expansion of the Neighborhood Market (NM) footprint provides a valuable opportunity to win shoppers’ increasingly smaller and more frequent trips. But that will require clarifying the value proposition for NM, which right now is a stock-up destination for shoppers. In addition, the high rate of cross-shopping between NM and the Supercenter highlights the potential for cannibalization between the formats, rather than new sales. Source: Kantar Retail analysis January 2015

Executive Summary: Walmart Shopper Review
Amazon’s penetration among Walmart’s core shoppers creates a significant competitive threat. Not only is Amazon the top retailer cross-shopped by regular Walmart shoppers, but Walmart shoppers also are more likely to frequent Amazon.com than they are to regularly visit Walmart.com. Creating a shopping experience on Walmart.com that drives frequency and reach will be key. Shoppers’ engagement with mobile emphasizes the opportunities for engagement. Mobile is starting to change the nature of interactions between shoppers and retailers. The reach of Walmart’s mobile Savings Catcher tool, which launched in summer 2014 and had an almost immediate impact on the depth of the retailer’s relationships with its shoppers, is a prime example. Shopper marketing will need to reconsider the significance of this tool in the years ahead. Source: Kantar Retail analysis January 2015

Table of Contents Shopper Penetration Shopper Motivations
Penetration by banner, channel Demographic profile Shopper Motivations Financial concerns Spending intentions Reasons to shop less Shopping priorities Shopping Behaviors in Store Trips, trip type, and baskets: Supercenters, Neighborhood Market Where else Walmart shoppers shop Brand Position: Price, Assortment, Experience, Access Value demands and perceived price leadership Perceptions of the Walmart shopping experience Digital Interactions Mobile engagement Savings Catcher January 2015

Shopper Penetration Penetration at the Walmart Supercenter continues to slowly decline, even as the retailer adds new stores. Shopper traffic to Neighborhood Market (NM) and Walmart.com is increasing as the retailer is making concurrent investments in these developing vehicles. Meanwhile, the profile of the Supercenter and Discount shopper continues to shift. While the regular Walmart shopper still largely skews lower income and larger household, the total shopper base is becoming younger and higher income. In addition, likely in part because the base is getting younger, smaller households are making up a bigger share of Walmart’s base—which will influence what they look for in a one-stop stock-up trip. The NM shopper is distinctive: younger, more urban, and more ethnically diverse than the Supercenter’s shopper base. In a shift versus previous years, this shopper base’s degree of affluence is now the same as the Supercenters—skewing mid- to low-income (i.e., less than $50,000 a year)—instead of skewing slightly higher income. This shift may influence the types of products sought in store. Walmart.com’s shopper is also different: the base is younger and more likely to have children at home versus the Supercenter’s core shopper base, making it a particularly attractive audience. Contrary to popular stereotypes, this audience is not more affluent than Walmart’s store shoppers—suggesting that low prices play a key consideration for both Walmart’s digital and store audiences. Sources: Kantar Retail analysis; store visits; website January 2015

Weekly Shopper Penetration Rate Wanes
Penetration is softening across many channels, as many shoppers curb the number of retailers they shop. The notable exception is the value and quick-trip convenience-oriented value discount channel. Percent of Households Shopping Channel at Least Weekly Weekly Shoppers, by Channel 2009–2014 PPD Supermarkets +1.3 Convenience stores -2.3 Mass channel -0.3 Drug stores +0.4 Value discounters/dollar stores +3.2 Warehouse clubs -1.0 Source: Kantar Retail ShopperScape®, October 2009, 2010, 2011, 2012, 2013, and 2014 January 2015

Walmart’s Core Formats Lose Share
Shopper penetration at Walmart’s core big boxes continues to decline, losing 7 percentage points between 2007 and 2014—as Amazon nearly doubled its penetration. Meanwhile, Neighborhood Market’s expansion is boosting its share. Percent Shopped Walmart during Past Four Weeks, by Format Amazon.com *Analysis for Neighborhood Market is limited to states in which Neighborhood Market had a presence as of January 2014 Source: Kantar Retail ShopperScape® , January 2007–September 2014 January 2015

NM Penetration Is Strong in Its Core Markets
A higher share of shoppers say they recently shopped NM in Walmart’s core markets: the west, southwest, central, and southeast divisions. Penetration is lower in the northeast, where there are fewer NMs per capita. Percent Shopped Neighborhood Market in Past Four Weeks, by Region 9% 3% 10% 10% 9% Regions based on Walmart’s small-format field structure Source: Kantar Retail ShopperScape®, October 2013–September 2014 January 2015

Big-Box Shopper Profile Continues to Change
Walmart’s core shopper is now younger and higher income, and lives in a more densely populated area than five years ago. These shoppers also have smaller households. Demographic Profile of Monthly Walmart/WMSC Shoppers All Shoppers Monthly Walmart/WMSC Shoppers PPT Difference Q3 ‘14 Q3 ‘14 Q3 ‘13 Q3 ‘09 ‘14–’13 ‘14–’09 Sample Size 12,211 6,417 6,531 6,965 Annual HH Income <$25K 25% 27% 28% 0.5 -1.0 $25K–$49.9K 29% -0.4 -1.1 $50K–$74.9K 18% 0.1 -0.1 $75K–$99.9K 11% 10% -0.3 -0.8 $100K+ 21% 17% 14% 0.0 3.0 Kids in HH Children under 19 at home 24% 30% -2.0 Generation Generation Y (born 1982 to 2002) 9% 8.0 Generation X (born 1965 to 1981) 31% 32% 0.2 Baby Boomers (born 1946 to 1964) 38% 40% 39% 37% 0.8 2.7 Seniors (born before 1946) 13% 12% 22% -1.5 -9.9 Hispanic Yes 1.3 Household Size 1 member 19% 5.3 2 members 34% 36% 3+ members 42% 45% -3.3 -0.6 Home Ownership Own or are buying 63% 64% 66% -2.9 Rent 0.3 0.6 Live with relatives (in their home) 7% 6% 4% 1.0 Market Size <100k 15% -3.0 -4.9 100k–499k -0.5 -0.2 500k–1,999k 23% +0.6 +1.5 2m + 53% 43% 41% +2.0 +5.6 Note: Bolding/shading highlighting indicates significant difference between time periods noted (95% confidence level) Source: Kantar Retail ShopperScape®, July–September 2009, 2013, and 2014 January 2015

NM Shoppers Still Differ From the Supercenters
NM’s shopper base has begun to align more with the Supercenter base over time, particularly as NM’s base skews more lower income. But shoppers are more likely to live in denser markets, aligning with the strength of the stores in suburban and urban markets so far. Demographic Profile of Past Four-Week Shoppers Walmart SC Walmart NM Sample Size 27,556 3,201 Annual HH Income <$25k 27% 28% $25k–$49.9k 26% $50k–$74.9k 18% $75k–$99.9k 11% $100k+ 16% 17% Locale* Rural 8% Small Town 22% 12% Large Town 13% 14% Suburban 36% 47% Urban/City 20% Kids in HH Yes No 73% 72% Generation* Gen Y 23% Gen X 31% 33% Boomers 38% Seniors Race/Ethnicity White Non-Hispanic 66% 52% Black Non-Hispanic Hispanic NM shoppers also are more likely to be younger as well as to be Hispanic or African American. *See appendix for definitions Note: Analysis limited to states in which NMKT was present as of January 2014 Note: Highlighting indicates significant difference between column percentages (95% confidence level) Source: Kantar Retail ShopperScape®, January–September 2014 January 2015

Walmart.com Shopper Profile Differs
Given younger shoppers’ affinity for digital tools, it is not surprising that Walmart.com’s shopper base skews younger than the shopper base for the Supercenter. Demographic Profile of Past Four-Week Shoppers Walmart/WMSC Walmart.com Sample Size 22,836 4,296 Annual HH Income <$25k 27% $25k-$49.9k 28% $50k-$74.9k 18% $75k-$99.9k 11% $100k+ 17% 16% Locale* Rural Small Town 22% 21% Large Town 12% 13% Suburban 37% 34% Urban/City 15% Kids in HH Yes 26% 30% No 74% 70% Generation* Gen Y 19% Gen X 31% Boomers 39% 38% Seniors 9% Race/Ethnicity White Non-Hispanic 68% 66% Black Non-Hispanic Hispanic Walmart.com shoppers are also more urban and more likely to have kids, highlighting the opportunity to cater to young families with the convenience offered by online shopping. *See appendix for definitions Note: Highlighting indicates significant difference between column percentages (95% confidence level) Source: Kantar Retail ShopperScape®, January–September 2014 January 2015

Shopper Motivations A strengthening job market throughout the year, and falling gas prices to end it, has bolstered shoppers’ financial positions overall. But rising prices elsewhere are pressuring Walmart shoppers’ ability to spend, and shoppers’ growing tendency to shop less in general are cutting into Walmart’s traffic. Walmart shoppers feel their financial health is about the same as it was last year, though some feel their income positions have strengthened. Still, a higher share of shoppers is shopping Walmart less often, largely a result of shopping less overall. In addition, Walmart’s core low-income shoppers’ capacity to spend is still being challenged by rising prices and household essentials spending. As shoppers seek out shopping experiences that are worth their time, priorities around product quality, assortment, and in-stocks are now more important than they were five years ago; conversely, one-stop shopping is less important. Sources: Kantar Retail analysis; store visits January 2015

Walmart Shoppers’ Financial Health Is Steady
Across metrics, Walmart shoppers largely feel their financial health is about the same as last year, though their confidence in their income levels has improved. Household Financial Health of Walmart Shoppers Q3 2013 Q3 2014 Job security Much better/somewhat better off 20% 21% No change from last year 62% 64% Somewhat worse/much worse off 18% 15% Household Income level 28% 30% 47% 49% 24% Credit card debt 26% 25% 56% 57% Monthly mortgage/car payments 22% 66% 68% 12% 11% Worth of investments 60% 16% 13% Value of home 29% 58% 61% 14% 10% Measured across a range of factors, significantly more shoppers than last year feel their financial health has stayed about the same. However, a higher share feels better about income levels, likely a result of the stronger job market. Note: Shading indicates significant year-to-year difference (90% CL) Source: Kantar Retail ShopperScape®, July-September 2013 and July-September 2014 January 2015

Overall, Spending Plans Have Improved
Walmart shoppers’ spending intentions are gaining traction over time, in line with all shoppers. A majority aim to hold spending steady, while nearly one-third are still curbing their budgets—indicating that value appeals are still very important. Near-Term Spending Plans: Percent Planning to Spend More/About the Same vs. Same Time Last Year (three-month moving average) Near-Term Spending Plans vs. Same Time Last Year: Q3 2014 Note: No significant differences between all shoppers and Walmart shoppers (90% confidence level) Source: Kantar Retail ShopperScape®, January 2009–September 2014 and July-September 2014 January 2015

Top Reasons Leading Those to Spend Less
Of the nearly one-third of Walmart shoppers planning to spend less, Have Not households’ spending on essentials such as food and fuel is more likely to limit those shoppers’ ability to spend at retail; conversely, Haves are simply looking to save more. Walmart Shoppers’ Reasons for Spending Less at Retail (among past four-week Walmart/WMSC shoppers who said they planned to spend less at retail in the coming month vs. the same time a year ago) Have Nots* Haves* Not as much left over after buying food/HH essentials 52% 39% HH income not keeping up with rising prices 46% 30% Trying to simplify my life by buying fewer things 34% 36% Trying to reduce/pay down credit card balances/debt 31% 35% Saving more in general 27% Concerns about present economic conditions 28% HH income is lower vs. last year 26% Just have fewer needs this year than I did a year ago 24% 25% Spending more on gasoline 17% Concerns about economic conditions 6 to 12 months from now 22% Spending more on healthcare 20% Spending more on home heating/cooling costs 23% 14% *”Have Nots” are those with an annual household income of less than $60k; “Haves” are those with an annual household income of $60k+. Note: Shading indicates significant year-to-year difference (90% CL) Source: Kantar Retail ShopperScape®, September 2014 January 2015

One-in-Five Is Visiting Walmart Less Often
An overall pullback in shopping is driving shoppers to visit Walmart less frequently. Other key reasons also involve shoppers looking for a more “pleasant” or “convenient” experience. Shopping Frequency at Walmart/WMSC Compared with Same Time a Year Ago Reasons for Shopping Less Often at Walmart/Walmart Supercenter May 2013 May 2014 Just shopping less in general 40% 44% Other retailers offer more pleasant shopping experience 28% 21% Shopping other retailers more conveniently located 25% 20% Can find better overall value at other retailers 22% 18% Doing more shopping at supermarkets Shopping more at retailers where can get in and out quickly 15% Doing more shopping at Target/SuperTarget 16% Doing more shopping at dollar stores 14% Doing more shopping at online-only retailers 13% 12% Dividing shopping between more stores; doing less one-stop shopping 10% Doing more shopping at warehouse clubs 9% Note: Shading indicates significant year-to-year difference (90% CL) Source: Kantar Retail ShopperScape® May 2013 and May 2014 January 2015

Walmart Shoppers’ Priorities Have Shifted
Compared with their attitudes just after the recession, Walmart shoppers are now more focused on product quality, assortment, and availability in Walmart’s core categories. Largest Changes in Reasons for Store Choice for Food/Groceries and HBC: 2014 vs. 2009 (among past four-week Walmart/WMSC shoppers) Food/Groceries HBC Products Less Important vs. 5 Years Ago Convenient location Ability to one-stop shop Open 24 hours More Important vs. 5 Years Ago In-stock on items I want High quality fresh foods More brands I like Less Important vs. 5 Years Ago Convenient location Better value Ability to one-stop shop More Important vs. 5 Years Ago High quality products Broad selection of preferred products Broad selection of brands Source: Kantar Retail ShopperScape®, Feb/May/Aug 2009 and Feb/May/Aug 2014 January 2015

Shopping Behaviors Walmart’s grip on the stock-up trip is strong. But as its shopper penetration erodes and customer traffic wanes, it has seen flat to declining comps for most of 2014 and Lifting comps will depend on targeting specific areas of improvement in the Walmart shopping experience. Edible grocery remains a powerful trip driver for the Supercenter. Walmart’s efforts to improve its fresh proposition with shoppers will be an important tool in boosting the frequency and basket size of these trips. NM also threatens to cannibalize the Supercenter’s position, given its popularity as a stock-up destination and high cross-shopping rates in areas where NM is present. Honing NM’s assortment and messaging will be key to help differentiate the format’s proposition. Amazon continues to represent a formidable competitor to Walmart. Walmart.com has opportunity to increase both its reach and visit frequency with Walmart shoppers. Source: Kantar Retail analysis; store visits January 2015

Trips to Walmart Pick Up Slightly This Year
Shoppers’ average monthly trips to Walmart discount and supercenter stores ticked up in While this reverses the recent trend for Walmart, it is in line with overall trends in the channel. This rate is still behind NM shoppers, as they visit the store roughly six times a month. Average Number of Trips per Month* Comparatively, NM shoppers now report making an average of 5.9 trips per month. Note: *Self-reported Source: Kantar Retail ShopperScape®, Feb/May/Aug/Nov 2010 , 2011, 2012, 2013, and 2014 January 2015

Food Drives Half of Trips to Supercenter
Grocery and consumables motivate the vast majority of trips to the Supercenter. Moving this traffic around the store through cross-box solutions that incorporate general merchandise will continue to be an important goal for Walmart. Main Reason for Last Trip to Walmart Supercenter Was to Buy … General merchandise HH essentials Edible grocery items HBC Areas of Store Shopped/Purchased on Last Trip to Walmart Supercenter Highlighting the opportunity to support cross-box conversion from grocery to general merchandise Conversion Rate 91% 72% 87% 84% Source: Kantar Retail ShopperScape®, May 2014 January 2015

Supercenter, NM Are Stock-Up Destinations
The Supercenter remains a stock-up destination, though many also use the store for quick-trip needs. Despite NM’s supposed role in Walmart’s portfolio as a fill-in trip destination, a higher share of its shoppers fulfill their stock-up trips at Neighborhood Market, though quick trips also are popular. In contrast, Dollar General is predominately a quick trip destination. Primary Reason for Last Trip to Retailer (last trip to buy food/groceries/HH essentials/HBC products) *Analysis for all three retailers limited to states in which Neighborhood Market was present as of January 2014 Source: Kantar Retail ShopperScape®, Aug/Nov 2013, Feb/May/Aug 2014 January 2015

Basket Size Continues to Tick Down
Suggesting a shift toward smaller-ticket purchasing, Walmart Supercenter/Discount shoppers’ basket sizes again declined in 2014—though the NM basket is still 13% smaller. Grocery remained about 75% of the Supercenter/Discount basket, versus 80% for NM. Amount Spent on Last Trip to Walmart/WMSC* (most recent trip to buy food/groceries/ HH essentials/HBC) $101 $99 $96 $95 $88 More effective cross-box merchandising could be an important tool to diversify and build baskets when shoppers are oriented toward smaller trips Comparatively, shoppers reported spending $83 on their last trip to NM in 2014, with 80% of this spent on food, household essentials, and HBC items Note: *Self-reported Source: Kantar Retail ShopperScape®, Feb/May/Aug/Nov 2010 , 2011, 2012, 2013, and 2014, Aug/Nov 2013 and Feb/May/Aug 2014 January 2015

Amazon, Dollar Stores Expand Reach
Amazon remains the top cross-shop destination for Walmart Supercenter/Discount shoppers, and Dollar Tree and Dollar General also have increased their penetration. Top 25 Retailers Cross-Shopped by Walmart/WMSC Shoppers Jan–Oct 2009 Jan–Oct 2014 PPT Diff ‘14 vs. ‘09 Amazon.com 30% 54% 24.0 Walgreens 39% 36% -3.5 Target/SuperTarget 44% 33% -10.1 Dollar Tree 24% 32% 7.8 The Home Depot 31% -0.5 CVS/pharmacy 28% 29% 0.8 Lowe’s -1.6 Kohl's 27% 2.2 Dollar General 25% 2.5 Kroger (all banners) 23% 1.5 JCPenney -5.8 eBay.com 21% Sam’s Club 22% -1.1 Family Dollar 18% 20% 1.4 Best Buy 19% -3.6 Macy's 0.4 ALDI 10% 17% 6.4 Bath & Body Works n/a Costco 14% 15% 1.3 Kmart -3.9 PetSmart 0.3 Barnes & Noble -3.1 Bed Bath & Beyond 0.6 Staples Michaels -1.3 The dollar stores’ and Aldi’s gains in penetration among Walmart shoppers emphasize the intensifying competition for consumables trips. Meanwhile, many of the retailers that have experienced the biggest cross-shopping declines among Walmart shoppers have concurrently seen sales struggles overall and increased competition from Amazon and others in general merchandise categories. Note: Shading indicates significant difference between column percentages (95% confidence level) Source: Kantar Retail ShopperScape®, January-October 2009 and 2014 January 2015

For Walmart.com, Amazon Is a Big Challenge
Amazon has nearly three times the online penetration with Walmart shoppers than Walmart.com does. And Walmart shoppers are hooked: one in five shop Amazon weekly, twice the number who shop Walmart.com that often. Driving reach and frequency are two key concerns for Walmart.com. Top 10 Online Retailers Shopped by Walmart Shoppers Walmart Shoppers Shopping Frequency 1 Amazon.com 54% 2 eBay.com 21% 3 Walmart.com 19% 4 Kohls.com 9% 5 BestBuy.com 6 JCPenney.com 7 Target.com 8% 8 BarnesandNoble.com 7% 9 Macys.com 10 HomeDepot.com Source: Kantar Retail ShopperScape®, September 2013–August 2014 January 2015

For NM, Regional Grocers Present a Challenge
NM shoppers’ cross-shopping patterns highlight regional competition for grocery dollars—as well as the potential for NM to cannibalize the Supercenter. For instance, in the central division, nearly every NM shopper also shops the Supercenter. Top Grocery Retailers Also Shopped by Neighborhood Market Shoppers, by Region West Walmart/WMSC 60% Costco 49% Safeway 34% Albertsons 32% Trader Joe’s 31% WinCo Foods 25% Central Walmart/WMSC 85% Sam’s Club 33% ALDI 28% Whole Foods 14% Hy-Vee 12% Dillons 11% Northeast Walmart/WMSC 65% ALDI 29% Kroger 27% Sam’s Club 26% Food Lion 20% Whole Foods 19% Southwest Walmart/WMSC 76%* Albertsons 34% Sam’s Club 30% Costco 25% Sprouts H-E-B 22% Southeast Walmart/WMSC 77% Publix 69% Winn-Dixie 42% Sam’s Club 28% ALDI 24% Save-A-Lot 18% Whole Foods and other specialty grocers (Sprouts, Trader Joe’s) notably have a solid cross-shop with NMKT shoppers across regions *Read as: 76% of Neighborhood Market shoppers also shopped at the Supercenter. Note: Regions based on Walmart’s small-format field structure. Including grocery, Walmart, and club competitors Source: Kantar Retail ShopperScape®, October 2013-September 2014 January 2015

Brand Position Price, Assortment, Experience, Access
Walmart continues to emphasize its low price promise to its value-conscious shopper base—as these demands are still of primary importance. However, the retailer also recognizes that assortment, experience, and access are also very important—raising the strategic importance of these dimensions. The retailer is working to fix its immediate problems as well as to enable more solutions to meet shoppers’ rising demands. Shoppers’ perceptions of Walmart’s price position is strong, though supermarkets contend for value perceptions in fresh, and to a lesser extent non- perishable grocery. Assortment and experience dimensions of the trip have the opportunity to improve, including opinions of in-stocks, food selection, and store service. Sources: Kantar Retail analysis; store visits January 2015

Value Matters Most to Walmart Shoppers
Spending less is the top priority for Walmart shoppers, and it matters more to them. Notably, having fun also is more important to Walmart shoppers, and having a stress-free experience ranks just behind value considerations. What Matters to Shoppers (% ranking factor among top four most important when shopping) Arrows indicate a significant difference between Walmart shoppers and all shoppers (95% confidence level) Source: Kantar Retail ShopperScape®, January–October 2014 January 2015

Walmart Has Price Leadership, Mostly
Impressions of Walmart’s price leadership are positive and relatively strong across categories. The exception is fresh grocery, where supermarkets far outpace Walmart. Shoppers also are divided on non-perishable grocery, where as many feel Walmart leads, as do supermarkets. Type of Retailer Viewed as Price Leader, by Category (among all primary HH shoppers) Shoppers’ perceptions of supermarkets’ fresh price proposition are much higher Source: Kantar Retail ShopperScape®, November 2014 January 2015

Clear Room for Improvement in Experience
Walmart’s price promises largely measure up, but its efforts to improve in-stocks and to tailor assortment will be important to meet shoppers’ expectations. Also, not many agree that Walmart is a “pleasant” place to shop. Ideal Grocery/HH Essential/HBC Shopping Experience vs. Shopping Experience at Walmart (among past four-week Walmart/WMSC shoppers) Price Assortment and Access Experience Source: Kantar Retail ShopperScape®, May 2014 January 2015

Penetration by banner, channel Demographic profile Shopper Motivations Financial concerns Spending intentions Reasons to shop less Shopping priorities Shopping Behaviors in Store Trips, trip type, and baskets: Supercenters, Neighborhood Market Where else Walmart shoppers shop Brand Position: Price, Assortment, Experience, Access Value demands and perceived price leadership Perceptions of the Walmart shopping experience Digital Interactions Mobile engagement Savings Catcher

Digital Interactions As how shoppers interact change, so to must Walmart’s means of engaging them. In particular, mobile devices are becoming the interface of these exchanges, as using these devices to search for coupons or research assortment options is becoming increasingly popular—especially among Walmart’s base. Walmart’s rollout of Savings Catcher, its digital price- matching tool—as well as the program’s quick uptake by shoppers—highlights the willingness of shoppers to take part in mobile and its ability to drive relationships with shoppers in the store. Even as Walmart increases its investments in digital, the retailer still has opportunity to build its reach, as its mobile connection with shoppers lags behind competitors such as Amazon and Target. Investments in mobile will be a key means to integrate digital into the established Walmart shopping experience and to reach increasingly connected shoppers. Sources: Kantar Retail analysis; store visits January 2015

Walmart Shoppers Highly Engaged via Mobile
Walmart shoppers are more likely to engage in a range of activities on smartphones, particularly when it comes to savings- and assortment-oriented features. Activities Engaged in on Smartphone during Past Six Months (among smartphone owners) Index: Walmart Shoppers vs. Total 111 110 107 104 121 105 108 100 Note: Green indices indicate significantly greater vs. all shoppers (95% confidence level) Source: Kantar Retail ShopperScape®, March 2014 January 2015

But Walmart Itself Can Improve Engagement
When it comes to interacting with its own shoppers via its mobile app, Walmart trails Amazon, Target, and Costco. About half of its shoppers who use the app used it in-store, however, indicating the opportunity for suppliers to support in-store mobile integration efforts. Percent of Retailers’ Past Four-Week Shoppers Who Used Retailer Apps in Past Few Months (among smartphone owners) Source: Kantar Retail ShopperScape®, January 2014 January 2015

Savings Features Are Top Mobile Priority
Walmart shoppers rank access to promotions their top priority for mobile app features, with tools that make the store experience easier—such as item location, geo-targeted deals, and lists—not far behind. Accordingly, Walmart advertised such deal features on its app this past holiday. What Shoppers Would Like to Be Able to Do on Walmart App In-Store (among Walmart shoppers who own a smartphone) Note: Gen Y Walmart shoppers significantly more likely to want every feature vs. all Walmart shoppers (95% confidence level) Source: Kantar Retail ShopperScape®, January 2014 January 2015

Savings Catcher Tool Is Catching On
A month after this digital ad match tool rolled out nationally, Savings Catcher had already garnered widespread awareness, and even higher awareness among Walmart shoppers. Awareness of Walmart’s Saving Catcher Tool (% of shoppers who are aware of Savings Catcher) *Recent shoppers are those who have shopped Walmart/WMSC during the past four weeks; regular shoppers are those who say they usually shop Walmart/WMSC every month Source: Kantar Retail ShopperScape®, September 2014, Kantar Retail store visits January 2015

Young, Affluent Shoppers More Likely to Use Tool
About one in five Walmart shoppers have already used Savings Catcher; that figure jumps to two in five among those who are aware of the tool. Walmart’s Gen X and “Have” shoppers are most likely to have used Savings Catcher. Percent of Walmart Shoppers Who Have Used Savings Catcher, by Cohort Walmart recently reported that 81% of the Savings Catcher receipts came through mobile devices, indicating that this program is driving usage of Walmart’s mobile app. *Have Nots have an annual HH income of less than $60k; Haves have an annual HH income of $60+ Source: Kantar Retail ShopperScape®, September 2014 January 2015

For further information please refer to www.kantarretail.com Contact:
Laura Kennedy Principal Analyst Rachel McGuire kantarretail Insert document footer Insert date and year

Appendix: ShopperScape® Key Definitions
Generational Cohorts Gen Y: Born 1982–2002 (note: ShopperScape® surveys heads of household 18+, so Gen Y respondents in ShopperScape® are 18 to 32 years old in 2014) Gen X: Born 1965 to 1981 (33 to 49 years old in 2014) Boomers: Born 1946 to 1964 (50 to 68 years old in 2014) Seniors: Born in 1945 or earlier (69 or older in 2014) Haves & Have-Nots Haves: Annual HH Income > $60,000 Have-Nots: Annual HH Income $60,000+ Locale Rural: I have to drive more than 10 miles to do even basic shopping (such as for groceries) Small Town: I live in or near a town where I can do all or most of my everyday shopping (such as for groceries) and shopping for some special purchases (such as a television or dress apparel), but I have to travel to a larger city to have more than a couple of options for shopping for special purchases Large Town: I live in or near a large town where I do all or most of my shopping, both for everyday needs and special purchases, but the town is not immediately next to a major metropolitan area Suburban: I live in a community surrounding a major metropolitan area that contains many retail shopping options, including multiple grocery stores, shopping centers, etc. Urban/City: I live in a densely populated neighborhood where I primarily/exclusively walk or use public transportation/cabs to do my everyday shopping (such as for groceries)

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