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December 15, 2003
Wal-Mart Taking Names
As many Cobb readers know, I'm in awe of Wal-Mart and I hope it takes over the world. That is because I believe in world peace through discount shopping, seriously. Reading through an excellent article on that which Sam wrought, I see a glitch. The glitch is prosperity itself.
The ultimate power of Wal-Mart's efficiency is compounded by the fact that it sells recgonizable brands. This is absolutely key. The entire difference between Wal-Mart and Big Lots or Costco in terms of consumer acceptance has everything to do with the nature of American tastes. A watch is a watch is a watch and a credit card is a credit card. But here in America, people are willing to pay the difference between a Timex and a Bulova, and it's tangibly cooler to use a gold card rather than a blue one. This might seem silly in the eyes of our poorer neighbors around the globe, but great gobs of GDP are expended keeping up with the Jones.
Wal-Mart offers the best of both worlds - recognizeably bourgie First World name brands at Second World prices. As the name brand vendors deal with this devil, all the money is being squeezed out of the value they have built over the years in their brands. Wal-Mart doesn't give a damn. A watch is a watch to Sam, and time is on his side.
Having been a Nordstrom shopper all of my adult life, I took the plunge and began buying clothes from Wal-Mart. Truth be told, I went from Gap to Old Navy to Target before I was comfortable at Wal-Mart. Hard economic times were part of the equation too. In bad times, in poorer areas, when style doesn't count Wal-Mart wins. But understand that for both the Wal-Mart supplier and consumer, capitulation is part of the deal.
The Wal-Mart game is about commodity pricing. They push the envelope of consumerism by putting more and more goods into that bucket of commodity. This is excellent for civilization. We really shouldn't be wasteful and market mechanism really should work like this. It is capitalism in the extreme, which means it will show its ability to contradict human nature. And that contradiction will appear when people (both consumers and producers) get sick and tired of low prices and high volumes as the ultimate motivator.
By definition, Wal-Mart cannot go upmarket. It can attempt to bring down the high and mighty brands, but who is actually going to buy a business suit, a diamond engagement ring or furniture from Wal-Mart? Nobody. But nobody has yet found the formula for delivering more upscale products well. The market may end up split into two. A few high end retailers and then Wal-Mart. But stores like Kohl's and Target are ones to watch.
Unless Lileks is right about 'Samuels' , the weakness is in plain sight.
Posted by mbowen at December 15, 2003 10:45 AM
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Comments
Regarding your son's piece: very nice. He plugged into all the things that are psychically important. And you'll notice, he said nothing about Walmart.
In my eyes, Cobb, and to merge this this other post of yours, the reduction of places to shop and the triumphalism of megastores is something akin to "obeying king's or queen's rules". The workers work for too low a wage; the products are largely assembled with oppressed labor elsewhere. Cheap products are only good for those who have money to spend.
Posted by: joseph at December 16, 2003 09:02 AM
I believe that shopping is not a fundamental, but civilized human activity. The alternative is, of course, growing and picking your own cotton, cleaning it, spinning it, weaving it and dyeing it. You can then cut it into patterns and sew your own clothes which your children will promptly wear out in less than a cotton season. And that's just clothing, we haven't talked about food or shelter. I've read enough about the times when people had to do this, John Brown in particular (Russell Banks’ Cloudsplitter) to reasonably assume that given the alternative of providing all of these things (most likely via your 8 working children) that most people will choose to work in a factory and shop.
I set a bottom line of civilized subsistence at the point where families can afford to let their children go to school. That may well be below what we in the US consider the poverty line, but it’s a hell of a lot better than many people in the world can get. My bottom line for bourgie brotherhood is at the point where individuals buy clothes with some sense of fashion – they let their clothes speak about them.
Let us remember our neighbors’ real position. Those people who live in concrete houses or in the bush are ready to work and their lives are no less valuable than anyone else’s. The Wal-Martification of the globe is a step forward for the poor and destitute and a step backward for those of us who have benefited from the head bashing days before child labor laws and the 40 hour workweek. If I haven’t said it before clearly enough, understand it now. Nobody who works according to US labor law, broadly interpreted, has any complaint of substance in comparison to those of the third world.
I think it stretches credibility to assert that any significant fraction of the products American consumers purchase from other countries is the product of pressed labor or slavery. Certainly much attention is do prison labor products from China, but I am, based upon my sense of international labor standards, willing to allow that to go to 5% of imports. If 95% of our imports are slavery free, we get an A, so long as we press for reform. The only way to do that is to enrich countries by increasing trade and creating the same kind of prosperity that ultimately takes market share away from Wal-Mart and towards more upscale retailers, a bourgie consumer choice.
Again, the only way to beat Wal-Mart is to pay more. Shop at Whole Foods, do you?
Posted by: Cobb at December 16, 2003 09:48 AM