Wal-Mart Shows Problem of Moving Outside of Brand

The New York Times has a fabulous piece on Wal-Mart's attempts to expand its brand outside the strictly discount realm and even posts a report done for the company by its former advertising agency last October.

It's interesting to get an inside lok at the troubles Wal-Mart is having in expanding its market. I find myself almost feeling sorry for management there because of the relentless drive of financial markets to keep seeing growth. The company has 138 million shoppers a week, for gosh sakes. Just how are they supposed to grow a number like that?

Yet that is the expectation, and so Wal-Mart is trying for more affluent shoppers. But that goes smack up against its brand identity as a discounter, which is a bad idea. No company can be all things to all people, no matter how large it is. As the story and report say:

But now, as Wal-Mart experiments with contemporary clothing, flat-screen televisions and nine-layer lasagna, that format has become a hindrance. To a shopper who wants to purchase a single dress for an evening out or a DVD player to watch a movie, "Wal-Mart’s one-stop shopping format becomes a time-consuming irrelevant obstacle," the report says.

That environment is conducive to "zero-time" shopping, in which a customer spends just a few seconds thinking about a product, like a new bottle of dishwashing soap. "But people don’t buy electronics, home décor and apparel in zero time," the report says.

The inevitable result is a loss of focus that will eventually cause financial problems. You'd think there could be other options for the company. For example, let it ship orders of commodities to more affluent customers - products they're associated with but at higher margins for the convenience factor. Maybe there are services they could provide as shoppers spend time in the store - dry cleaning, oil changes, photocopying - that don't require the sense of expertise and trust. Some of these it could provide through partnerships with companies that are already in the business. But going upscale? Time to send management out into the stores to work for a week and see what their business is really all about.