Ted Hurlbut

Target and Wal-Mart Give Individual Attention to Customers

August 31, 2010

FROM RETAILWIRE:
Target and Wal-Mart Stores may be the biggest mass merchandisers in the country, but both believe business results can be improved by tailoring what they do to individual shoppers. Do you think Target and Wal-Mart are capable of achieving a "neighborhood store" feel?      [more...]

For both Walmart and Target, just about anything is possible, given their resources, the commitment to doing it and the time necessary to get it done. Both have the ability to execute what they conceive.

The question is whether these initiatives are significant enough to move the bottom line in any meaningful way. Both have succeeded by driving efficiencies of scale, slashing costs, and being the low-price store for their customers. anything that raised costs was to be eliminated.

These initiatives, by definition, raise marginal costs, and as such fly in the face of the fundamental business model. If they push to make them a significant part of their operations, they are at odds with their business model. And if they don't push to make them a significant part of their operations they are insignificant, and likely a distraction from their core mission.

As much as they might like to tailor and customize assortments and marketing messages, in the end they are and will remain mass-merchants, and their customers expect them to consistently deliver the lowest possible prices, day in and day out.