Thursday, December 28, 2006

What does 2007 hold for Wal-Mart?

What does 2007 hold for Wal-Mart?
2006 was a rough time for Wal-Mart Stores Inc. (NYSE:WMT) in many media respects, as the company missed targets, saw same-store sales growth decline, and saw some lows that had not been reached in a decade. Still, the world's largest retailer saw growth this year -- just not as much as some unrealistic market watchers wanted.

Wal-Mart's marketing strategy took several hits, a scandal in its advertising department as Wal-Mart dropped its new ad agency. Also Wal-Mart's attempt to cater to higher-income shoppers and regionalize the products in its stores to cater to local demographics saw little steam (so far). So, what should 2007 bring?

I'm not sure Wal-Mart can ever change its image to what it thinks it can with consumers. The power of branding is too strong, and Wal-Mart's super-glued brand is "low prices." Period. Trying to market to shoppers who associate Wal-Mart with low prices (and not anything else) is probably going to prove futile. But, hey, growth has to come from somewhere, right? Perhaps outside of the U.S. -- like India and China, where Wal-Mart is moving into with rapid aplomb.

No comments: