Now Wal-Mart plans to pursue upscale markets. There is a Wal-Mart test store in Plano that features "expensive jewelry, $500 bottles of wine, plasma TV sets and other expensive items along with organic foods."
Being the master of the low end is not easy. Many are called, few will flourish. The secret is to squeeze costs and margins till they cry for help. It may not easy, but it is simple. The model is unmistakable: pile em high, sell em cheap.
So when Wal-Mart decides to go after the upscale market, it is suddenly obliged to learn an almost entirely new marketing game. Now the trick is to follow consumer taste and preference has it plays whack-a-mole niche to niche, leaping daringly trend to trend.
The good news, I think it’s good news, is that Target has demonstrated that this is possible. To its credit, Target didn’t just master some of the secrets of the high end, it actually rewrote the rule book. It came precious close to capturing design as it was moving from a small community of professionals with a characteristic weakness for interesting glasses to a much larger American mainstream. Target very nearly branded design as its own. It was a brilliant, audacious piece of marketing. (Thanks to Vincent LaConte, as below, I know that the hero of this piece is Ron Johnson, now VP of retail at Apple. Johnson was Vice President of Merchandising for Target Stores until 2000, presiding over what the Apple corporate website calls "new initiatives for branding, marketing and merchandising.")
But now that is gone. Or better, Wal-Mart will now have to be design-sensitive but it will get no special credit for being so. Is there a compelling play out there that it can claim for itself? It might go looking for a celebrity hookup of the kind that Kmart had with Martha Stewart. In this case, a taste arbiter lends her mastery of consumer taste to the retailer. It’s a kind of one stop shopping for the retailer. The perilous business of consumer sensitivity is farmed out to someone with their own suburb instincts and established track record.
Or, and as the author of Flock and Flow this would be my preference: that Wal-Mart invest in a big board with which all the trends and drivers of consumer taste and preference are tagged and tracked. This would be useful for the low end work. There will come a time in our culture where low prices and fast response times are not enough to satisfy the dynamism of the marketplace. But it will be especially at the useful at the top end where already we are seeing trends change so fast, we are sometimes tempted to wonder if they weren’t merely a figment of someone’s imagination, no sooner thought than gone.
Yes, on careful and dispassionate reflection, that would be my recommendation: build a big board using Flock and Flow as the template. You know where to find me.
McCracken, Grant. 2006. Flock and Flow: predicting and managing change in a dynamic marketplace. Bloomington: Indiana University Press. on Amazon here.
Van Riper, Tom. 2006. Wal-Mart Goes Upscale. Forbes. August 30, 2006. here.