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I apologize if I occasionally blog about Wal-Mart, but the thing is, it’s an interesting company to discuss. First off, it has an economy bigger than most of the countries in the U.N., and if you totaled up its security guards, it would probably have a larger standing army than most as well. Secondly, it single-handedly changed retailing in the U.S. in the 90’s as it took over. Thirdly, ever since it ascended to the dominant position and prompted all kinds of people to declare that eventually we’d all work there, it has pretty much devoted itself to a) mediocre performance and b) pissing people off through one PR disaster after another:

• let’s lock the illegal immigrant employees inside the store for the night!
• let’s hire a blogger to write ridiculously positive things about us, but not tell anyone she’s on the payroll!
• let’s re-arrange the employees’ lives on a weekly basis!
• let’s fire our podunk ad agency and that dopey smiley face and hire a real marketing professional… and then let’s immediately fire her for doing what big city marketing pros do, which is wine and dine one another.
• … you get the idea…

So there you have it. The company everyone feared rapidly becomes yesterday’s news. And suddenly, the big question is whether Wal-Mart has begun its long slow descent. It’s a big question for me, anyways, since I own the stock.

But then I saw this article in the NYT, It’s Not Only About Price At Wal-Mart, and it seems to exude a glimmer of hope. Wal-Mart seems to have analyzed its customer base and taken pains to identify exactly who its customers are, and why they shop there. On the face of it, it seems like some good insights were reached. They break their shoppers into 3 groups:

1. Brand aspirationals - ie. people who want to buy the top brands but can’t afford it.
2. Price-sensitive affluents - ie. the cheap rich.
3. Value-price shoppers - ie. people who try to live on the sort of salaries Wal-Mart pays.

OK, I’m having a little fun with my summaries. But the fact is Wal-Mart could be on the right path. Once you have clear customer profiles, everything else starts to fall into line… what products you need to carry, what price points you need to hit, what messages you want to convey. Wal-Mart has made previous attempts at moving upscale, and I always thought that seemed doomed to failure. Getting from ‘cheap’ to ‘luxury’ in your customers’ minds seems like a bridge too far. But the reality is that, as the article points out, there is no shortage of BMW’s in the parking lot. So once you know that they’re not there to shop for Gucci but rather to cram the trunk with stuff and brag to everyone at the country club about the great deals, you’ve got knowledge you can put into execution mode. It’s the execution mode where Wal-Mart has traditionally run rings around everyone else, so this might be good news for long-suffering stockholders.