Jingle Bells will sound more like “cha ching” at Walmart’s across the country this year, if the retailer’s forecasts ring true.
Wal-Mart Stores Inc. CEO Mike Duke pledges to “give America the best possible Christmas in 2012.”
Duke and other executives – commenting during the retailer’s 19th Annual Investor Conference held Wednesday (Oct. 10) in Rogers – are bullish on the retail holiday prospects saying they have bought deep, stocking more than 2 million televisions and doubled their iPad and other hot electronic and toy inventories so that customers will have the items they want come Black Friday or late Christmas Eve.
Duncan MacNaughton, chief merchandising and marketing officer for Walmart US, said if early layaway is indication of holiday expectations – Walmart is positioned to win market share through the back half of this year.
He said the retailer has $400 million of goods in layaway as of today (Oct. 10), which is some 50% of last year’s total in the just the first few weeks of the program.
Social media will play a larger role in this year’s holiday success, according to MacNaughton. He said the retailer is in close daily contact with its 22 million Facebook friends, an audience that has grown three times larger in the past year.
Each Tuesday Wal-Mart will roll back the price of a toy that Facebook friends have most requested. That campaign is dubbed “Toyland Tuesday” and will be rolled out this month.
He said company has asked 100 Twitter elves to help with service and holiday suggestions for the customers using that social platform. And gift suggestions will be posted on Pinterest in a separate campaign.
Walmart.com is also poised to do better through this holiday season, armed with a new intuitive search engine, Polaris, Duke said sales via conversion rates are up between 10 and 15% since launching in recent months.
The retailer will also ramp up its advertising in the coming weeks in both digital and mass media channels.
SHARE PRICE RESPONSE
The investment world was convinced by what Wal-Mart execs were saying at the investor conference.
Wal-Mart shares (NYSE: WMT) were trading nearly 3% higher Wednesday morning (Oct. 10) at $76.14, up $2 while the broader market posted losses. This marks a new high for retailer’s stock price that has been on a tear this year, up more than 26% after a lull that lasted a decade.
“Now you’re going to see us bring the same increased discipline to our capital expenditures that we have been bringing to operating expenses,” CEO Duke told the investors after his discussion about work to gain holiday market share.
He said the company is driving efficiencies in new stores and remodels by reducing construction costs while keeping the square footage growth where they want it.
“We are smarter about matching our systems investments to the size of the box and the need of the market. … Our op-ex and cap-ex discipline, combined with our initiatives in areas such as shared services and global processes and sourcing, will help us to continue delivering on our leverage goals,” he said.
The retailer is investing $2 billion in price while also reducing operating costs through fiscal 2014 in order to deliver on its low price and low cost business model. The company’s capital expenditures for fiscal 2013 is $6.5 billion, and is trimmed to $6 billion in 2014.
“We will also continue to deliver returns to our shareholders through dividends and share repurchases,” Duke said.
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