Travis R. Martin, CPA » Wal-Mart

Wal-Mart’s Great Value Gamble

travisrmartin — Tue, 23 Mar 2010 03:42:13 +0000

Wal-Mart is no stranger to dichotomy, especially when viewed through the public eye. Depending on who you ask, the company is a corporate model for small-town success, or a beast that swallows Main Streets whole. They are a provider of everyday low prices, or a bully that squeezes suppliers for every last penny.

For Wal-Mart, there always seems to be two sides to every story.

Kraft's presence in the cheese aisle shrinks as Great Value grows

This has especially been true over the past year as Wal-Mart pursued a two pronged strategy emphasizing the expansion of their Great Value private label brand, while simultaneously streamlining store layouts and upgrading product offerings in clothing and electronics in an effort to appeal to the Target crowd.

The result?

With the ubiquitous white Great Value packages gobbling up shelf-space from the likes of Kraft and Smucker’s, some brand-conscious shoppers have begun to turn their back on the world’s largest retailer. According to an article in this week’s Time Magazine, Wal-Mart experienced negative same-store sales growth for the third straight quarter. That’s an unheard of decline in Bentonville. To combat the slide, Wal-Mart plans to do what Wal-Mart does best. Another round of price cuts.

As for the Great Value line, it appears that it won’t be getting cut anytime soon, which is unfortunate.

Wal-Mart’s entire empire has been built on the idea of selling a wide swath of brand name products for less than their

Great Value products fill the pasta aisle

competitors. Now, with the expansion of the Great Value line, that philosophy has become “we sell an increasingly limited line of brand name products, and their Great Value equivalents, for a little less than our competition.” Sound exaggerated? In the past year, Wal-Mart has jettisoned nearly 300 name brands from their shelves in order to make room for their own private label offerings.

Not only does the growth of the Great Value line limit what we as consumers can find at Wal-Mart now, it also limits what we may buy in the future. As companies like Kraft lose shelf space at Wal-Mart, they lose the ability to get new products into the market. Instead of having the luxury of multiple product lines, producers will be forced to stick with a few “category killers,” which could stifle innovation (not that there are a lot of ways to innovate with Oreo cookies, but still).

Some may argue that sales in the Great Value line have been strong, and that may be true. But, think of the emotional connection that people will have to these products. Items like Kraft Mac-N-Cheese and JIF Peanut Butter remind people of the good times they had growing up and after-school snacks made by mom. If you’re in a household that is trading down, Great Value products may remind you of how your parents were out of work during the worst recession in 80 years. This is why I do not buy into the idea that consumers will continue to stick with “generic” products over the long run.

Private label products are meant to complement, not replace, name brands. Until Wal-Mart realizes this, they will continue to lose foot traffic to competitors who provide customers with the variety they want.

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Walmart’s Viral Dilemma

travisrmartin — Fri, 11 Sep 2009 15:09:10 +0000

As communities across the country scramble to defend themselves against the H1N1 virus, the nation’s largest retailer is struggling with a viral infection of a different kind – one that can’t be stopped with antibiotics or layers of disinfectant.

In case you missed it (and maybe it’s for the best if you do), the latest internet craze is People of Walmart, a website that allows users to upload photos of the colorful characters they encounter while shopping at their local Walmart.

Cleanup on Aisle 6? No species is exempt from the mockery of People of Walmart.Com

If you’ve ever been to Walmart at two in the morning, you may already have a good idea of the subject matter involved here. Think mullets, outrageous tattoos, profanity-laced ball caps, and ridiculously undersized clothing, all captured on camera phone and shared with the world.

People of Walmart, launched a month ago as an inside joke between three friends, has gone viral with thousands of visitors and hoards of media attention.

Based on the site’s success, it is clear that people find humor in seeing someone browse the cereal aisle with a live parrot perched on their shoulder. What isn’t as clear is what, if any, effect the website will have on Walmart’s new makeover strategy, Project Impact.

The premise behind Project Impact is straightforward: improve the Walmart shopping experience by providing customers with better service, more attractive store layouts, and higher quality merchandise in areas such as apparel.

Anyone who has spent an hour fighting their way through the big-box retailer’s crowded, narrow aisles only to spend another thirty minutes waiting for a cashier can tell you that an improved shopping experience is a noble goal for Walmart.

But, creating a better atmosphere for existing customers is only part of Walmart’s new plan. The real hope is that Project Impact will help the Bentonville, Arkansas based company expand their already dominate market share by luring customers away from competitors like Target and Toys-R-Us.

Walmart has lost the hyphen and created a new logo as part of their Project Impact strategy

Unfortunately, the popularity of People of Walmart suggests that Walmart may have a hard time winning over the loyalties of Target shoppers who expect a more “upscale” experience. Even though the site’s original purpose was to poke a little fun at the most extreme Walmart shoppers, People of Walmart has unwittingly become a microcosm for how the public perceives the store.

Walmart’s “always” low-prices have earned them the reputation of being a store that caters to society’s lowest common denominator. It’s as if the Yellow Smiley Face logo of Walmart has been saying “give me your most eccentric, possibly unstable shoppers yearning for Ramen Noodles by the case load.”

If that sounds elitist, it shouldn’t. I shop at Walmart every week. But, the truth is, you won’t find a People of TJ Maxx or a People of Target or even a People of KMart.

And since the “shopping experience” includes store aesthetics and the makeup of the shoppers, the idea that Walmart can go upscale by throwing out a few nice sweaters is questionable.

Walmart’s problem is as much about image as it is about inventory, and a website highlighting the store’s anything goes demographic isn’t helping matters.

So, now we’ve come to Walmart’s viral dilemma. They can try to shut down the defamatory, yet beloved, website or just ignore it. As B.L. Ochman of Advertising Age points out, both paths have complications.

“If Walmart tries to squash the site, they’ll quickly become the laughing stock of social media. If they laugh with the site, they’ll be accused of laughing at their own customers.”

Ochman’s conclusion is that Walmart should lay low and wait for the internet crowd to move onto something else, which will eventually happen, as Lol Cats and Awkward Family Photos have proven.

For the time being, Walmart appears to be taking Ochman’s advice, having declined the opportunity to speak with ABC News on the matter. In addition to sparing Wally World from the wrath of “social media,” this approach helps keep the website on the internet fringe and out of the six-o-clock news.

What this approach doesn’t do is address the fact that many of the stars of People of Wal-Mart are unwitting participants, snapped covertly by fellow shoppers. Nor does it address the potential damage the site could have on Walmart’s brand.

At some point, Walmart may be forced to respond to these concerns.

Until that day comes, you may want to double-check yourself in the mirror before heading to your friendly Walmart.

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Green Day Sticks It To The Man, “21st Century” Style

travisrmartin — Fri, 22 May 2009 17:28:41 +0000

In 2004 they asked not to be called American Idiots. Now, Green Day is trying to prove that they are not American Sellouts.

The alt-rocker’s latest album, 21st Century Breakdown, will not be carried in Wal-Mart stores due to the band’s refusal to create an edited version specifically for the retailer. According to Wal-Mart policy, any album containing an explicit lyrics sticker is automatically barred from their stores.

For now, the band appears to be treating the blacklisting, and resulting loss of sales, as a minor inconveinence.

“As the biggest record store in America, they should probably have an obligation to sell people the correct art,” Bassist Mike Dirnt told the Associated Press.

The “art” Mike is referring to?

For those of you who couldn’t tell a Green Day from a weekday, here’s a sample from the track “Horseshoes and Hand Grenades.”

Well, everything that you employ
Was meant for me to destory
To the ground now
So don’t you f*** me around
Because I’ll shoot you down
I’m gonna drink, fight and f***

I’m no rocker, but that has to be stretching the definition of “art.”

Even more disturbing than Mike’s creative defintion of “art,” is Green Day’s watered-down idea of what it means to stick it to “the man” – in this case the corporate suits at Wal-Mart.

21st Century Breakdown has essentially been kicked out of the biggest music retailer in the country, and all Green Day can do is say “no, sorry, we won’t make you another record.”

Come on. That’s so NOT rock-n-roll. Green Day is supposed to be the voice of a misguided, disgruntled generation.

If the band wants to retain their street cred with teens and unemployed twenty-somethings across the nation, this is what they need to do.

First, demand that all of their records be pulled from Wal-Mart shelves immediately.

Of course, making this happen would involve lawyers, record label executives, and a bunch of other balding white guys. And there’s nothing kick-ass about that.

Rather than waiting for that legal battle to play out, the band should take matters into their own hands and schedule a different kind of summer tour this year.

Instead of hitting the stadiums and arenas, Green Day needs to gas up the bus and stop at every Wal-Mart in the country and buy (or better yet, steal) every single Green Day album from each store.

After each CD heist, they would hold an impromptu free concert in the Wal-Mart parking lot, setting up their stage as close to the front doors as possible.

The liberated Green Day cd’s? The band could inscribe each one with some witty, filthy piece of anti-Wal-Mart rhetoric (use your imagination here) and pass them out as collectors items to fans. Or, maybe they could just pile them up on the stage and blow them up. Pyrotechnics = cool.

Trespassing, theft, use of illegal explosives, disturbing the peace….at thousands of locations across the US?

Now, that’s sticking it to the man.

21st Century Ain't What it Used to Be

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Feds Should Seek Corporate Sponsors for Post “War on Drugs” Era

travisrmartin — Mon, 18 May 2009 02:54:50 +0000

It took 40 years, 8 presidential administrations, and billions of dollars, but the plug has been pulled on one of the most recognizable public policy brands in Washington’s history: “the war on drugs.”

The phrase was officially retired from the public lexicon by drug czar Gil Kerlikowske during a recent interview with the Wall Street Journal.

Kerlikowske, the former Police Chief of Seattle and current head of the White House Office of National Drug Control Policy, blamed the “war on drugs” mentality for impeding the country’s progress in dealing with illegal drugs. “Regardless of how you try to explain to people it’s a ‘war on drugs’ or a ‘war on a product,’ people see a war as a war on them,” Kerlikowske said.

The Government’s semantic shift is part of a new vision for U.S. drug policy – a vision that emphasizes rehabilitating drug users instead of imprisoning them.

Although Kerlikowske and the Obama Administration may have a vision of what 21^st century drug policy should look like, they now lack a catch phrase for Americans to rally around. With “fight,” “war,” “battle,” “struggle,” “throw-down,” and “confrontation” all officially out as possible ways to describe America’s anti-drug efforts, the country may find itself unable to simply name the problem, much less solve it.

So, now, the Government not only has a drug problem, it also has a marketing problem.

And, who better to solve a marketing problem than corporate America?

Amazon - free super-saver shipping for a super drug-free America.

For years, corporations have successfully convinced unsuspecting Americans to purchase items they don’t need with money they don’t have. Alcohol and tobacco companies even have experience trying to convince the public not to use their products.

This marketing know-how could just as easily be used to rebrand our nation’s drug efforts.

Imagine – a Drug Free America, Delivered by UPS or how about Wal-Mart’s “Always Low Prices, Never High Associates.”

If corporate America joined the Government’s nameless anti-drug effort, we might see Taco Bell urging people to “Think Outside the Bong.” We may even see Verizon Wireless boasting that they have the nation’s biggest drug-free network. Can you “say no” now?

By enlisting America’s finest businesses to shape the public perception of America’s biggest problem, the Obama administration may be able to keep the next 40 years of drug policy from looking like the 40 years that preceded it.

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Texting Goes from Classroom to Cash Register

travisrmartin — Sat, 07 Mar 2009 07:46:21 +0000

I fight on the front lines in a losing battle. My enemy is small in stature, no bigger than a deck of cards. It has the ability to stealthy move between pockets, purses, and palms. It invades my territory on a regular basis with an impenetrable wall of distraction.

I fight it everyday. Sometimes I win, but only because I’ve come to recognize certain tell-tale signs – like the soft glow of a blue light underneath a table. Once I see the enemy, it is mine – at least for a day.

My battleground is a high school classroom. My nemesis is the cell phone. And I’m not alone.

From California to Florida, school administrators are scrambling to develop plans that will prevent students from spending their high school years with their heads bowed toward the floor praying to the text messaging gods. For the most part these plans have done little to curb the rampant use of cell phones in the classroom.

Meanwhile, lawmakers have had their hands full trying to decide what to do about “sexting,” an emerging trend in which teenagers send racy messages and photos to one another with their cell phones.

Where will the next faceoff between adults and teenage cell phone users take place? My guess is at your local retail and fast food establishments.

In the last month, I’ve noticed two teenage “associates” at my friendly neighborhood Wal-Mart ducked away in far-flung corners of the store (no one will see me in the Christmas Clearance aisle!) tapping out messages on their cell phones.

The last time I went through the drive-thru at my local Taco Bell, I watched in disbelief as an employee carried on a text conversation while taking orders over her headphone. A second employee actually had to squeeze her way around the texter just to get to the window and hand out my food.

These are only two examples, but I do not think they are isolated incidents. For businesses that rely on teenagers to provide front-line service to customers, the rise of texting in the workplace could definitely be bad news.

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