Wal-Mart Too Cheap for CE?

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In case you haven’t read it already, the New York Timeshas an interesting piece on some internal hand-wringing at the nation’s largest retail chain. It turns out that “going upscale” is hard to do:

A confidential report prepared for senior executives at Wal-Mart Stores concludes, in stark terms, that the chain’s traditional strengths — its reputation for discounts, its all-in-one shopping format and its enormous selection — “work against us” as it tries to move upscale.

As a result, the report says, the chain “is not seen as a smart choice” for clothing, home décor, electronics, prescriptions and groceries, categories the retailer has identified as priorities as it tries to turn around its slipping store sales, a decline likely to be emphasized Friday during Wal-Mart’s shareholder meeting. {Emphasis mine}

What has hurt Wal-Mart in the upscale business, the memo argued, is its “zero-time” shopping environment. As in, you spend “zero time” thinking about what kind of shampoo you want to buy. That’s not the way people shop for higher priced goods.

More memo:

Wal-Mart’s advertising agency recommended a series of solutions, though the company has so far not adopted most of them. For electronics, it suggested creating a no-hassle, no-questions-asked returns policy that would make people feel more comfortable buying expensive televisions and stereo systems.

Just like Costco! Oh wait.

Now, Wal-Mart is number 2 in our list of Top 100 CE retailers so obviously they’re doing something right. But at a minimum, the memo reinforces some of the ways Wal-Mart’s competitors can key-in on perceived weaknesses.


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