Wal-Mart's Troubles And Red State America
Daniel Gross of Slate writes a good piece today about something I have been thinking a lot about since the election, which is retailing and Red State America. I haven’t formulated a deep argument here yet, other than to say that Wal-Mart is the perfect retailer for Red State America, where shoppers’ personal finances have been negatively affected by plant closings, farm closings, business failures, and outsourcing to a point where the only thing that matters to these folks is saving money. That doesn’t make these folks bad people or bad Americans, but it does set in motion a self-perpetuating downward spiral where Corporate America at the macro level shuts down manufacturing or farming here at home, damaging our communities, and driving the financially strapped families to shop at the shiny new, and foreign-supplied super store that just moved into the adjacent farmland, thereby displacing and crushing the neighborhood Mom and Pop.
But through its predatory practices and its proudly lowbrow approach, Wal-Mart as Gross notes may have pushed the “you’ll keep buying from us because we’re cheap, and you know it” approach a little too far. I would like to think that part of their troubles stem from an acknowledgment on the part of their shoppers of the damage that Wal-Mart has done to Main Street America, but I am not stupid. Most Wal-Mart shoppers are there to save money, pure and simple, and I suspect that most of them don't give a thought to where the products are coming from, whose Mom and Pop was put out of business in the process, and how many of their employees don't get health benefits.
I do think that James Cramer’s comments in Gross’s piece may be prescient about the shopping experience. Sure, the shoppers want to save money, but they don't want to be taken for granted in some sort of cattle management environment either. The price differential between what Wal-Mart is offering and what Target is offering is minuscule, yet Target has a better environment and better urban locations. Wal-Mart makes you feel like you are there to pay them for being cheap; crowded aisles, lowbrow brands, and a "yes we're dirt cheap and that should be good enough for you" attitude. Target on other hand at least doesn't try and come off as one notch above a dollar retailer, and as Gross says, Penney's and Sears have figured out that shoppers will accept price competitiveness and not price matching, in exchange for a little flash. You don't have to match Wal-Mart, just be in the ballpark. Anyone remember White Front stores, whose whole goal was to be cheap and herd you through and out of the store? They are long gone.
Part of this I feel is that shoppers, especially in a decent (but not great) economy, want to feel a little pandered to, and not treated like walking wallets. A large part of Red State America may only care about price and not care about the rest of it, but I would be willing to bet that even those folks like occasionally a less lowbrow experience than is portrayed on the Mom and apple pie TV spots that Wal-Mart runs, especially if they feel they can save money at a Sears or Penney’s. This is what happened on this past Friday; the price reductions that I saw at our mall at those two stores were staggering this early in the season, but that mall and those two stores were packed.
Anyway, I will not lose sleep about any troubles that Wal-Mart may have this season.