The market is in a tizzy because Wal-Mart's Black Friday sales figures are off.
Visa and Master Card, however, claim charges were up 10-15% over last year -- what gives?
Jim Cramer stated the obvious last night on CNBC's Kudlow & Cramer, claiming "Maybe Wal-Mart is a dowdy old store that hasn't changed its look in 30 years?" He said that his kids will race to the car to go to Target but have no interest in Wal-Mart. He further said that when price is the issue, he will go to Costco.
Our Lafayette, Colorado Wal-Mart must be the worst in the whole world. I always feel like I am getting the vibe of a Soviet Supermarket in 1987 when I go in there.
I watch TV shows and read magazines about their innovations in Retail. Their use of computers and integrated supply chains and cost cutting are important, but I suspect Schumpeterian gales as other stores can copy these advances -- and add a more vibrant customer experience.
It's not only Schumpeter, it's Virginia Postrel's "Substance of Style." As price and selection become commonplace (thanks to Mr. Walton), people want price, selection -- and style. My old employer, Target, has filled the bill. (I worked six weeks in-between bands stocking toys overnight when the store was closed.)
I am not a Wal-Mart hater. Sam is a link in the US retail innovation that stretches from Montgomery Ward, James Cash Penney -- one of the best parts of a great tradition. Yet I suspect that they must innovate in the style arena to keep their lead.
Technology has made style available to everyone. Modern metal forming and plastic molding techniques make the price of a stylish box about the same as a basic one. Just as economy cars no longer have to look like it to make a price point so to with everything from toasters to clothes. Target got out in front by employing some well known designers to make things for them on a budget, something it turns out the designers enjoyed. I have only set foot in my local Wal-Mart once and came away with the same impression as you, just too basic and stark.
Posted by: Silence Dogood at December 1, 2004 12:45 PMTechnology has brought down the cost of style, but it is still a cost. Wal-Mart has prospered on squeezing every nickel out of every fixture. I think this mentality which made them prosperous has also made them vulnerable to Target.
Deciding that a designer must be hired, and must be paid attention to means allocating capital to something that has a difficult to measure ROI (I'm lifting this idea right out of Virginia Postrel's book). Many companies have succeeded wildly by doing it -- yet it is tough to walk into the CEO's office and claim it has to be done.