Branding is hard

Branding is hard. It’s often a tightrope walk—misstep and you can find yourself in a lot of trouble. Just ask Coca-Cola about New Coke…

Which makes me wonder about what Wal-mart is up to:

In its boldest effort yet to target upscale shoppers, the nation's largest retailer is opening a new store this week with an expanded selection of high-end electronics, more fine jewelry, hundreds of types of wine ranging up to $500 a bottle, and even a sushi bar.

Wal-Mart says it won't duplicate this format anywhere else. But if plasma TVs, microbrewery beer and fancy balsamic vinegar sell in Plano, those items could be added to stores in other affluent communities.

With a hat tip to Marshall at Edelman, what I wonder is this: is Walmart wandering too far from it’s core business? I once lived less than 5 miles from multiple Walmart stores, none of them the same as any of the others.

In recent years we’ve seen the expansion of Walmart into market niches-- Superstores combine regular stores with a grocery store, Neighborhood Markets focus solely on grocery business while the regular Walmart continues to focus on quality merchandise at low prices.

That last bit is the key; that is Walmart’s brand. It’s what they built the business around, and on that point there is no disagreement. The Tribune article linked above argues that: Retail experts say nearly half of American families shop at Wal-Mart at least once a week. They say the retail giant has nearly tapped out its middle-class base and must attract consumers who love Target and Costco but not Wal-Mart.

With about 3,700 U.S. stores, Wal-Mart has nearly saturated the market, and analysts say future growth depends on boosting sales by offering a better shopping experience. The company is renovating 1,800 stores as many of its older outlets have started looking a little tired.

I work in advertising, but when it comes to branding I profess no real expertise. Obviously Walmart’s management team is paid to know these things and to make decisions accordingly. It is obvious they believe that changes to the brand are necessary and a good thing for the stores.

Time will tell, but I imagine that Coca-Cola once thought Coke was a tired brand.