Think Customers: The 1to1 Blog

I would commend everyone interested in this question to read "Focus: The Future of Your Company Depends On It" by Al Ries (I have no affiliation with the book or author, by the way!). Companies (or autonomous business units) that try to extend their brands in the pursuit of growth for growth's sake usually regret their strategy in the long term, even if it works in the short term. Examples abound.... How can one team of senior executives [ultimately] manage so many different businesses very, very well? They cannot, and in the history of business, the exceptions prove the rule.

I think it's the only way for them to go. A while ago, they helped make the markets saturated with new sophisticated customers having come out. And now it's time to handle what they created in a new, targeted way. With a whole range of department and speciality stores being around to lure their most advanced customers, the only sound response is to shake up the product mix to align with the right demographics holding people in. And I guess, if it goes the right way, it won't be the same Wal-Mart we used to know. A witty move.

I have difficulty believing that the affluent will shop for anything other than commodity items at WalMart. Something makes me think this is a somewhat veiled attempt to woo Costco's affluent customers over to WalMart/Sam's Club...especially in light that a number of Sam's Club items are showing up in WalMart stores.
I'm not sure the affluent will feel right at home shopping next to Wally World's core constituents...especially when some of them feel that Target is on the low end of their shopping ladder....and that WalMart is likely percieved as much lower than Target on that same ladder.
What's more interesting is the number of posters who mention store cleanliness as a major deterrent to shopping at WalMart. Fill the stores up with all the high-end merchandise you want but you won't get shoppers back with dirty stores. Just ask Winn-Dixie, K-Mart, Burger King, and a host of others who used to "own" their market space and now are scraping by....

From my view I think that it will be better for Wal-Mart to concentrate on the particular market they think they will earn profit from, rather than having more outlets without attaining their set objectives. From this case we can note that the increment in energy has also given problems to Wal-Mart's distribution. Concentrated strategy will be better for Wal-Mart to substain in the market. For example, here in Ghana, Scancom Ghana Limited is the sole producer of AREEBA chips and is the market leader in the communication industry. For this reason many customers are still trying to purchase some of their chips because of the good system of their network. But refuse to think that the more subcribers you obtain in the market the poorer your network becomes. You need to improved on your network activities before you produce another chip. To their notice, Ghana Telecom, the sole producer of ONE TOUCH chips and direct competitor to Scancom, is about to take over the market share because they are producing within their capabilities and their customers are always satisfied with their services. As soon you dial you reach the partner you want to comunicate to. Same thing implies here in this case.

I read with much interest your commentary on Walmart, and I think you are on point. Less we not forget the errors of former #1 retailer, Sears. Who ironically, Walmart surpassed. Sears in the mid to late 80s as you'll recall as you may recall had Coldwell banker, Discover Card and dean Witter under its vast umbrella. They truly wanted to capture the adage of being 'where America shopped". History suggests this strategy took them from their core competencies, and arguably they have never been the same. If Walmart wants to expand to these new horizons, I see at best them presenting these servives/products as a complimentary offer from their core strengths.

This is a major shift in Wal-Mart strategy: Moving toward customization means moving away from lowest cost efficiency. The increase in operating expenses seen during this last reporting period is likely to continue as stores are customized. The question is whether there is enough profit in the new strategy to make up for what will be lost and result in an overall increase. With Tesco and its obssession with cost efficiency entering the U.S. market this year, Wal-Mart will be challenged on its own turf as it shifts toward a new strategy.

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My first reaction is: great for manufacturers. It enables them to begin to reconfigure their offerings along similar lines. They have been largely doing this in the past but this more-targeted approach by Wal-Mart offers more product/ choice opportunities. The difficulty is shifting the mind of the mass consumer that when they walk into the Wal-Mart it WILL NOT be the same and that is a challenge. It could also provide Wal-Mart with increased complexity that technology can limit but not totally control.

Ouch. Martin Schneider cites as good example Volkswagen for the strategy Wal-Mart is most likely to adopt. Just look at what VW has become by wanting to leave the image of everyone's car behind: a lacklustre and loss-making brand. It's not exactly an Audi and not a Volkswagen anymore, just another good car. And that simply ain't good enough in today's marketplace.

The limits of growth come to all of us one way or another. Learning to live with one's limits is the key to survival in such a setting. For Wal-Mart this might well mean a lot more stores but smaller stores. Still offering the same goods but not in the usual pile 'm high - sell 'em low fashion anymore.

My only hope for WalMart is that their new strategy will be such a disaster that the company will never recover. Nothing they could ever do will make me walk into a WalMart.

Hello,
It seems to me that Wal-Mart is suffering from Affluenza and is thinking that more really is more. Strategy 101 (made famous by Michael Porter) tells us that companies should either focus or go for volume (Wal-Mart’s original strategy) but to try and do both (Wal-Mart’s new strategy) will just end in tears.

A Wal Mart is opening a high end "neighborhood store" near my house. While I agree with Jim's comment about growing their customer base, I do not believe they will be able to rebrand themselves to a high end market. They have been, and will always be Wal Mart to me and most of my neighbors. Cheap products, dirty store and bullies. My loyalties will lie with my Safeway and Target.

Hi. I'm new here but I will give my opinium about that.Here on Brazil we have several choices to make and when we bought things the price reaaly does matter.In the aproach the supermarket Dia is taking advantage of this culture of prices and channels of supply.But the brand "Great Value" helps so much because links the litle companies and buyers.So this is good here in Brazil.

Read with interest your article on Wal*Mart’s delicate strategic shift that’s underway. I beg to differ however on the interpretation of what they’re trying to or need to do. Wal*Mart’s challenge is that it already owns blue collar America and probably in excess of $.50 of every discretionary dollar those HHs have to spend. It’s very difficult to tap more money from existing customer HHs that have no more money to give to the retailing giant. When you have loyalty and most all of their money, increasing share of customer is a long road to a small house.

Their more challenging and pressing dilemma is they need to retain their existing bedrock customer base while courting and winning a higher share of customer from the more white collar HHs. This will require a new ad image (which John Fleming and Julie Roehm are working on), changes in product selection and store formats and, importantly, a customer information collection system. While Wal*Mart has set the standard for moving products through the system and keeping track of them all the way up to RFID, to the best of my knowledge, they have only modest capabilities to tie customers back to transactions from which smart CRM, segmentation and targeting decisions can be made.

As thought-leaders in the space of increasing the insight and marketing efficiency against the 1/3 of US HHs that account for over 80% of discretionary spending, we’ve given this issue considerable thought and have helped clients in both retail and other industries in their quest to solve this Rubix cube puzzle. While I can’t speak for Wal*Mart, I’ll bet they wish it were as easy as simply increasing share-of-existing customers.

I so rue Wal-Mart's presence in America, and their role in bulldozing not only competitors, but effectively small town America and boutique business, that I can neither set foot in their stores, nor laud their new strategies.

Yes, cheap price makes it come to poor condition!

I tend to agree, but on the observation side because Im a brand bargain shopper I've been in many Walmarts in the NorthEast this past summer and have become terribly disappointed with the organization store cleanliness. They can become anything they want but know one will shop in stores that are considered in poor condition.