In this dismal economy Wal-Mart keeps racking up sales gains. Many people are quick to point to the slumping economy as the reason Wal-Mart is doing well. Lost your income? Shop at Wal-Mart.
But there’s more to it.
In 2007 the economy was already starting to slide, yet Wal-Mart didn’t fare so well. In 2007 Wal-Mart rolled out their “high fashion – low prices” campaign. In an effort to compete with Target’s “cheap chic”, Wal-Mart tried to upscale their offerings. The result? Abject failure. No traction whatsoever.
Why did something that worked so well for Target fail so miserably for Wal-Mart? Core values.
Target’s core values from day one have been to offer a step-up from the K-Mart/Wal-Mart fare. They have cultivated the image through store design, product selection and advertising. They have built their reputation and core customers on this premise.
At the same time, Wal-Mart’s core values have been to offer really, really cheap stuff. They have cultivated that image and their core customers over many years. Their core customers shop at Wal-Mart for one reason – really, really cheap stuff, not high fashion. So when Wal-Mart deviated from their core values, they alienated their core customers. And at the same time they were unable to shift customers loyal to Target.
But in 2008 they got it right. Wal-Mart went back to their core values and focused on what they do best – really, really cheap stuff. Yes, the economy helped. No, it wasn’t the only reason. How do we know? Because some other stores also did well in this economy, and not by offering really, really cheap stuff.
Independent stores have fared far better in this economy than their chain and department store counterparts. And the best performing independent stores did it by being true to their core values. They didn’t go after the low price market. They offered great customer service, or expert product knowledge, or high-quality merchandise, or all of the above. They made sure that their core customers’ expectations were met or exceeded. They didn’t leave their core for a grab at someone else’s pie. They stayed true to who they were.
Do you know what are your core values? Do you know who are your core customers and why they shop with you? The best stores know this and are constantly working to make sure every part of their business aligns with these values.
Our values are Fun, Helpfulness, Education, and Nostalgia. It isn’t about the products as much as whether those products are consistent with our values. It isn’t about the services, but whether those services are consistent with our values.
When you know who you are, the business model gets easier. When you stay true to your core, you create loyalty. And in this economy, when loyalty is most fragile, you need to hold onto as many customers as you can.
Everyone knows the old adage that it is cheaper to keep a customer than find a customer. Now, more than ever, that statement is showing itself to be true. Keep your core customers by sticking to your core values. Finally, a lesson from Wal-Mart we can all put into practice.