Could Wal-Mart Become the New Target?
Have you been in a new Wal-Mart lately? They just opened a new Wal-Mart in Tiftonia recently and I went in there a week ago. No longer your parent’s Wal-Mart. So why the change? One word: Target.
Target has been able to do something that Wal-Mart never dreamed of, build a reputation as a high-end, “fashionable”, reasonably priced retailer with a loyal base. Wal-Mart may have the lowest prices (thanks to their industry leading inventory system), but no one would ever make the argument that Wal-Mart was ever considered “fashionable”, let alone high-end. However, Wal-Mart never really had to worry about this because they really had no decently sized competitors. Well that all changed as Target began building Super Target shopping centers with more attention paid to interior details of the store and hiring well known designers like Isaac Mizrahi, Michael Graves, and Thomas O’Brien, to produce products specifically for Target. Suddenly Target looked like a viable competitor, an option for people with expensive taste on a budget. With the rising cost of living not met with a considerable increase in wage, this is becoming a larger market. It would appear Wal-Mart would have something to start worrying about.
So what was Wal-Mart’s reaction? Hire some of your enemy’s people. Wal-Mart hired an industrial designer and marketer from Target to revamp Wal-Mart’s image. They started selling products that Target has sold for years like Method brand cleaning products. You may have even noticed Wal-Mart’s recent commercials become a little more colorful and a little more “Target-like”. This all came together yesterday when I received this week’s Wal-Mart circular, where not only was Wal-Mart selling furniture that had a fashionable appearance like Target, several pages actually looked like they were straight out of Target’s weekly Sunday circular.
So why is this a big deal? This is Wal-Mart’s only missing piece. If Wal-Mart can attract shoppers who want more high-end, fashionable products, who will usually send more per trip, while keeping their current customer base, Wal-Mart will totally destroy Target. There are two things that Wal-Mart does incredibly well, handle inventory and negotiate ridiculous prices from their suppliers. They have THE most sophisticated inventory tracking system in retail, coupled with the ability to negotiate low, low prices by buying products in such large numbers. If Wal-Mart could begin to satisfy the niche that Target does currently, then Target is in BIG trouble. But hey, I could be wrong. All I know is I'm going to do my part. I'm going on my weekly trip to Target tomorrow.