The middle
ground of customers has long been the target of retailers, particularly
department stores but if a recent analysis of Walmart in the US is any guide that
is all changing and the middle ground is being clearly ignored in favour of
more upmarket offerings.
Walmart have
just announced something quite unusual in today’s retail world- a 2.7% increase
in year on year sales and observers are impressed. At least one commentator is
putting that down to a focus on more upmarket offerings. Walmart know that chasing
business down market has its problems, mainly maintaining a reasonable profit
with super low prices. But upmarket has potential, and acquisitions by Walmart
including Bonobos fashion, and more recently an association with Lord &
Taylor, the oldest luxury department store in the United States, has them
heading in that direction with great gusto. Walmart says it is going to turn
its website into a “premium fashion destination”.
The thinking
is that more and more people are dropping out of middle class and into working
class jobs while the number of millionaires across the globe is rising. The gap
between lower and upper classes is widening and every retailer needs to
position itself to chase business wherever it heads. At the same time buying
trends are changed by things like technology, and the number of people prepared
to spend $1200 on a new mobile phone, no matter what class they are in, is
quite bewildering.
Maybe it is
time market traders looked at targeting more upmarket customers with their product
ranges. QVM has long been regarded as a place for fresh food and bargains but
if an iconic retailer like Walmart can successfully challenge old norms then
surely market traders can do the same. And by the way, one of the advantages of
operating a website is that you can offer new ranges almost immediately to test
the water.
Times are
changing and perhaps it is time for traders to put on that gold plated thinking
cap.
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