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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