After years of sticking to its core value of providing customers with rock-bottom low prices, Wal-Mart is preparing to launch a new kind of positioning tactic.
Wal-Mart execs tell the New York Times that they have a better understanding of their customers, following months of extensive research.
Core customers, according to the world’s largest retailer, consist of three distinct types:
- brand aspirationals (low income, brand sensitive)
- price sensitive affluents (high income bargain seekers)
- value priced shoppers (low income, little choice)
I think it’s interesting that a behemoth like Wal-Mart is having to re-position itself according to what a variety of customers want. For nearly 45 years, people have flocked to the nearest Wal-Mart to save money and for the convenience of one-stop-shopping. Stores have re-invented the global economy and, most certainly, economies of small-town America.
The notion that Wal-Mart needs to segment its messaging, buying, and store configuration to appeal to three distinct groups is yet another clue that small business must continue to be flexible.
Because the internet, 200 TV channels, 200 radio stations, and ipods are fragmenting the masses, niche businesses may need to appeal to slightly broader segments. A coffee shop might offer a few high end health drinks or supplements.
In doing so, business owners need to be careful not to lose the “magic” of what orignially made their product so popular. The daddy of Starbucks recently issued a company-wide memo cautioning its stores that it had gotten away from core values. Lower priced coffee machines were faster, but took away the atmosphere provided in the original Starbucks. Pre-sealed bulk coffee containers preserved freshness, but the strong aroma doesn’t permeate stores.
For years, Wal-Mart has frustrated small business owners because our friends in Bentonville had volume on their side. Well, the giant retailer still has volume and low prices on its side, but people want more than a bargain. They want an experience, and they’re willing to pay for it. Local businesses should see this as an opportunity to perfect the experience of shopping in their stores — friendly service, excellent products, an engaging atmosphere.
Entrepreneurial thinking and execution of innovative ideas are critical in the Knowledge Age — whether you’re a small clothing store, a coffee shop, Wal-Mart, or Target.