Wal-Mart may not be the Darth Vader of retail: beware of Froogle and cell phones.

by Next Wave Team | Dec 3, 2005 | Advertising, BMW Advertising, Design, Everything You Want to Know About Advertising, Marketing & the Web, Retail, Web strategy

“Pardon me, please check your cell phone at the door” might be the future greeting at Wal-Mart- or any other retailer. Today many health clubs don’t allow cell phones in locker rooms because picture cams could be used to take pictures of people without their permission- your local retailer may not want you to be scanning barcodes into your web-enabled cell phone.
Picture this: you walk into Best Buy intent on buying a 60” Plasma High Definition TV. You’re ready to spend $5000 and then some- but, before you say yes to the kid in the blue shirt who’s thinking about the neon he’s going to be putting under his new Honda with his bonus for selling that big TV to you- you whip out your cell phone, scan the product barcode- and send it off to Google’s price comparison site- Froogle and back comes the information that if you drive 1.2 miles over to Circuit City (and here’s the link to the Google map) you can buy that same TV for $4200, and if you order it from Amazon.com you can get it for $3995.
Whoa. Did I just say going out of business sale for every brick and mortar store?
Quite possibly. There is a rule to retail, you can’t be cheapest on everything all the time- and still be profitable- even if you can accomplish huge economies of scale like Wal-Mart has, because there will always be someone else out there ready to beat your price on something.
A client of mine in the very competitive pizza business calls it the race to the bottom- and refuses to take part. He focuses on quality, value and being distinctive- making pizza that no one else does.
So in the retail wars- what has Wal-Mart really brought to the table that isn’t available somewhere else? Nothing. Just as GM flooded the market with different versions of the same vehicle- with so many dealers all competing to sell the exact same thing, Wal-Mart, even with the low price, can be beat by someone else- and if you have the power of the Internet in your palm- you may realize that you can get your milk, bananas and eggs at the Kroger on the way home for 20% less- so you skip Wal-Marts profitable items and just stick to the stuff that they make no margin on.
What retailers are going to be immune from this Internet assisted buyers- those that have unique products – like Target has done with its designer lines. Or where the branded buying environment is a lifestyle statement- like the new Harley Davidson showcase stores. Although I would have sworn that Apple was making a huge mistake by investing in retail stores- they’ve done two things very right- true customer service with hands on experts to guide the uninitiated in the way of Mac- and extended their brand into a branded environment that reinforces their high style franchise that differentiates them from all the other processor in a box manufacturers.
So, before you worry so much about the utilitarian low price behemoth that is Wal-Mart, or the froogle enhanced cell phone price shopper, start identifying how to evolve your shopping experience into a one-of-a-kind branded lifestyle. If you need further reinforcement of this branded experience- here are some of my favorites: IKEA, BMW Mini Cooper, Apple, Chipotle, Trader Joes, or W hotels.
What do you think?