Sunday, October 25, 2015

Attention Shoppers

So one of my friends recently posited this question: why do Wal-Mart and Target have such different reputations and feel so different despite the fact that they are functionally the same?

At first glance, it seems absurd: Target and Wal-Mart and clearly different. And yet they aren't. They're still both department stores and they have roughly the same layout and floor plan. So why the marked difference?

There's a few theories, some more obvious than others:
  • Target clearly focuses on mid-to-high end communities in the suburbs. Wal-Mart focuses on rural areas and suburbs in general. Both tend to avoid the cities, but clearly Wal-Mart aims for broad volume while Target captures a smaller but more lucrative market.
  • Even though the layout is largely similar in both places, with only small differences, Target's red tends to be warmer than Wal-Mart's cold, efficient blue. Also, Target tends to pepper their endcaps with homey crafts, rounded corners, and pleasing, pretty decorations, while Wal-Mart goes straight for value. One could easily envision Target as a living room, and Wal-Mart as a warehouse.
  • Target is playing the age-old game of lower volume, higher profit. It's wildly lucrative if you can pull it off, and Target has seemed to done just that. Add a bit of genius: people are willing to pay a premium for having a low-traffic, slow-paced shopping experience. Older, established department stores have always done this, of course, except they bet too much on what people were willing to pay, and instead ended up with old-fashioned overstock.
  • To add to the last point, Wal-Mart excels in cut-to-the-bone pricing, rollbacks, and eschews sales for guaranteeing low prices as the norm--all the while offering low-price but low-quality stock as a valid option. Target, for their part, doesn't do this, still giving shoppers choices but rarely offering the lowest available option.
  • For the record, K-Mart, once the leader but long since derelict, did a kind of a fusion of the two, hitching their success on mailings and sale fliers, combined with the legendary "bluelight special" that emphasized people to take their time shopping so they wouldn't miss a sale. In a day and age of the internet, where bluelight specials are stupid and fliers largely outdated, their main advantage slowly eroded away. 
I'm not sure if this answers the question, but I think it points to the right place.

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