By the 19th century, the department store was the most powerful force in retail. By the end of the 20th century, it was struggling to survive.
Department stores were good at grandeur but not so good at creating value for the things it sold or the consumer who shopped there. Indeed, from a brand point of view, the store proved actually entropic. Large, disorganized, understaffed, badly appointed, the department store actually diminished the meanings of the brand.
This is why, in the 1980s, brands began to demand a small corner of the department store for themselves. Ralph Lauren created its own little zone, complete with its own décor, pictures of rowing teams, old school oars. This was potent meaning manufacture but it came from a stow-away on the SS Department store. The brand was in effect wresting the retail experience out of the hands of the department store. To add injury to this insult, the national brand began to set up boutiques and retail outlets of its own. The Departure was now large, clueless and vulnerable, a relic of the retail experiment.
I couldnt help wondering whether this fate might some day over take Wal-Mart. To be sure, Wal-Mart is, at the moment, the most powerful force in retail. Eight per cent of retail goods sold in the US are sold at Wal-Mart. On the day after Thanksgiving, Wal-Mart stores sold $1.5 billion in merchandise. The sales total for the year will be something like $300 billion.
But signs of trouble in todays and yesterdays Wall Street Journal. Wal-Mart is facing competition on four fronts. It is not very good at fashion, and here Target poses a threat. It is not very good at making a connection to the locality and here stores like HEB supermarkets in Texas pose a threat. It is bad at things that are unusual. “Toy experts say an increasing number of affluent parents are avoiding Wal-Mart Stores in a quest for higher-quality and more-unusual fare. I think what were seeing is an anti-Wal-Mart backlash. Most of all, it is bad at making meaning. “Bed, Bath and Beyond is about selling lifestyle and Wal-Mart is about selling a commodity. (Marshall Cohen, chief industry analyst at NPD group).
In short, Wal-Mart is good at price but bad at meaning. It can “pile em high and sell em cheap. But in the process it reduces the brand to a commodity and the retail experience to a trudge through tedium. Placed in the Wal-Marts , brands created to deliver potent meanings, fashion, locality, individuality and lifestyle, are diminished or missing. Wal-Mart actually manages to wick away the very meanings that add value to the product and the life of the consumer.
Price is a potent advantage. And clearly Wal-Mart delivers here like crazy. With special relationships with off shore suppliers and the advantage of huge runs, the Wal-Mart advantage is unbeatable. But the rise of new competitors tells us what we have always known: the price is a necessary condition of consumer engagement not a sufficient one. The consumer culture turns not just on commodities, but on products that carry new and potent meanings into the life of the consumer. Take these out and, the results are clear. As Lear would say, “Allow not nature more than nature needs/ Mans life is cheap as beasts.
Merrick, Amy, Gary McWilliams, Ellen Byron and Kortney Stringer. 2004. Targeting Wal-Mart. Wall Street Journal. December 1, 2004.
Pereira, Joseph and Stephanie Kang. 2004. Toys March Upmarket. Wall Street Journal. December 2, 2004.
Shakespeare, William. 1606. King Lear. Act III, Scene iv.
Warren, Susan. 2004. Texas Grocer Thrives by Catering to Locals. Wall Street Journal. December 1, 2004.
Williams, Rosalind H. 1982. Dream worlds: mass consumption in late nineteenth-century France. Berkeley: University of California Press.