Wal-Mart Tries on Cheap Chic
Case number:
A12-07-0018
Abstract
Wal-Mart is at a crossroads. Its positioning as the world’s largest, low-price retail leader is being undermined by higher operating costs and slower sales growth. The solution, according to President and CEO Lee Scott, is to get middle-class consumers who shop the store selectively for grocery and personal care items “to cross the aisle” for higher-margin fashion goods. But Wal-Mart’s attempts at entering Cheap Chic—the fashion category dominated by competitors such as Target and H&M—have been undermined by strategic decision focused on operational efficiencies and a lack of understanding of branding nuances.
Teaching
This case examines the challenges faced by Wal-Mart in entering the Cheap Chic fashion category. Wal-Mart relied on a private label strategy, while competitors Target, Kmart, JCPenney, and H&M brought in well-known designers to attract the young fashion-forward customer and add cachet to store image. Relying on private labels required Wal-Mart to reevaluate the role of marketing communications, in-store merchandising, and in-store service support; even so, the results have been mixed. Students will need to address how Wal-Mart, with its heritage of operational efficiency and low price, can develop a successful brand program for its fashion lines.
Case number:
A12-07-0018
Subject:
Marketing
Year:
Setting:
U.S.
Length:
5 pages
Source:
Library