WalMart continues to alienate core customers-by Eli

WalMart continues to move off its core brand strategy with another series of business moves designed to alienate loyal low income shoppers. MSNBC Online  has a great story on this subject today.

The largest US retailer has stopped its lay-away program ---which allows consumers to pay over time on selected goods--which catered to customers without credit or debit cards. Only rival Kmart continues this program long ended by all other retailers.

The problem is that loyal lower income consumers who are the backbone of WalMart's success are being left behind daily. In addition to elimination of the lay-away program, product areas these consumers enjoyed including the fabric department are also being eliminated and replaced by more "upscale" goods of little interest to or affordable by these customers. Despite repeated failures in the upscale apparel arena, WalMart seems intent on forging some sort of game plan to win over higher income shoppers and completely undermine their brand strategy.

It is understandable that WalMart finds that in today's world it is too costly and unwieldy to manage lay-away programs. However, it is the impact of this move and others like it that hurt their most loyal customers that along with other actions are accumulatively undermining the company's long time value marketing message: low everyday prices on a wide selection of merchandise.

More importantly, long term, WalMart can not afford to lose these consumers because they are not going to succeed at winning over Target customers no matter how hard they try. A brand like WalMart of such magnitude with such a distinct image and defined positioning can not easily just forget its roots and try to become something else without taking an enormous hit, one that could destroy the company.

The Brand Man has for a long time advocated that WalMart consider launching new retail brands to lure higher income shoppers and not try to be all things to all people.

Ever since WalMart brought in new top management from Target they have gone astray and off strategy leading to poor sales and profit performance.

Sometimes even the most successful of enterprises becomes an ostrich with its head permanently cemented in the ground.

Watching out for you everday.

Eli