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November 2006 - Strategy Magazine
Biz

Convenience and customization
With the unveiling of its Supercentres, Wal-Mart Canada gets closer to achieving its goal of offering consumers a customized experience within a one-stop shop. Strategy sat down with president/CEO Mario Pilozzi to find out how.

by Lisa D'Innocenzo
page 11

Wal-Mart just got a lot bigger. The already gigantic general merchandise chain is on the eve of introducing three Supercentre stores - in London, Ancaster and Stouffville, Ont. - and plans to unveil four more in the new year, also in Ontario (Sarnia, Scarborough, Vaughan, and Brampton). Measuring between 165,000 to 200,000 sq. ft., they will house all of the general merchandise Wal-Mart is known for, plus enhancements to apparel, electronics, home décor and grocery, including, for the first time, fresh produce, baked goods and meat.

Mario Pilozzi, who has been president/CEO of Mississauga, Ont.-based Wal-Mart Canada for the past four years, says it's the next phase of the retailer's ongoing evolution that began when it first arrived on Canadian soil in 1994.

"We have expanded the assortment right from the get-go, and we have been adapting to more of what the customer wants. In 1998, we came out with our first pantry with a few items, and last year, we opened a pantry over 5,000 sq. ft., with 7,000 items. [The Supercentre] is the next step," he says. In most of the countries Wal-Mart operates in, it's already a heavy hitter in the grocery category.

What kind of opportunity exists here? Wal-Mart Canada won't divulge market share data, but recent figures from CIBC World Markets suggest that the total grocery market size of Ontario alone is $22.3 billion. Loblaw has 40.7% of that pie, Metro 20.1%, and Sobeys 12.3%. At this pre-Supercentre stage, Wal-Mart has a mere 3.5%.

Pilozzi, who joined Wal-Mart Canada in 1994, and had been with Woolco Canada for about 30 years, explains the new Supercentres will address the needs of time-starved customers. "They want to get whatever they need, as much as possible, under one roof in a convenient fashion. That is why we believe this is the right time to get into a Supercentre."

Pilozzi says advertising will continue to focus on value, while also getting across the one-stop shop message by showcasing a wide assortment of goods. "With TV there are different spots for different reasons. We have paid more attention to 'store of the community,' we have commercials in different languages, and commercials for a particular business, but there's always the message of good value." Agency partners are Toronto-based Publicis, as well as Allard-Johnson in Quebec.

In-store will also continue to be an important medium for the retailer, as emphasized by the launch of "shopcast" in the Supercentres (see sidebar). Pilozzi explains that communication starts in the parking lot, with messaging on cart carrels and on the building, and then continues inside through POS. "You walk into our front doors and there's communication on rollbacks, there's what we call our comp rail where consumer items and prices hit you right away. You walk into our departments with our huge signs over end caps, with our flags, with our Made in Canada program, with our private-label signing - it's all communication."

Strategy sat down with Pilozzi at Wal-Mart HQ in the weeks leading up to the launch of the trio of Supercentres to find out more about the launch of the mega-stores, as well as how they will fit into Wal-Mart's overall strategy of serving the needs of time-pressed consumers in a customized fashion.

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