Is Wal-Mart Trying to Lure the Rich?

Most people were pissed off when the CEOs of the big three automakers traveled to Washington in private jets to ask for a bailout. It was like having a beggar come up to you on the street and ask for $20 while checking his email and listening to Rihanna on his iPhone.

The economy being what it is (and what it has been), flashing any kind of bling is suddenly very taboo. Times are so rough that no one wants to be "that guy" flaunting his money when everyone else is eating Ramen and counting their pennies.

The first article is about people buying cheaper wine—but more of it. It also mentions that corporate gifting isn't including "traditional" things like bottles of Dom Pérignon. Why? It would send the wrong message to business partners and clients. As the article says, "Dom Pérignon is like taking the Learjet to Washington."

In the case of the New Yorker article, people are still buying expensive stuff but simply want them wrapped up in plain bags. In other words, they're brown bagging it. Those little blue boxes from Tiffany's (TIF)? Don't expect to see too many of them being shown around.

But what does this say about Americans and how we react to tough times? It's always been said that high-end products will continue to sell because the rich will always be rich, a 35% drop in the stock market be damned. But when an economic black swan—aka, a disaster—comes along and ruins everything, do rich people really change their behavior, or do they just pretend to change their behavior?

This also got me thinking about Wal-Mart (WMT), one of the few businesses that has actually done well over the past year. Lately they've been trying to lure in customers that traditionally don't shop there (i.e. richer people). Things like carrying the iPhone and their trendy fashion line that went nowhere in 2007 are just part of a strategy of changing their image. If fewer people see Wal-Mart as "the place where the poor shop," the more customers they'll get in their doors with their low prices.

In other words, they're trying to become more like Target (TGT).

I know people that offer a horrified look when I mention going to Wal-Mart. They won't say it, but you can tell what they're thinking, "Ugh! I would never go in there!" To them, it's like teenagers going to the mall with their parents.

Will we ever see Bill Gates and Will Smith buying stuff at Wal-Mart? Maybe not, if you catch a glimpse of Bill Gates or Will Smith with a Wal-Mart bag, make sure to ask them what's inside. You might score yourself a bottle of Dom or some other expensive goody.

Disclosure: none

Comments

[westtexasgirl:]

Personally, I believe it is smart to get the most bang for your buck. In shopping smarter, I can save more and invest more. I do not need a pretty package for my purchases, as a matter of fact, I recycle to help the county I live in, hoping there is a planet left for my grandchildren.

Feb 01 05:50 PM

[Big Al45:]

You may be right, but Costco is a better choice for upscale items on the cheap.

Plus, if WalMart gets too upscale they may lose their base customers.

Feb 01 08:39 PM

[Rafael Grillo:]

Great article. A few months ago, I wrote an article in my blog entitled "Wal-Mart: more than just low prices?" where I discussed the efforts Wal-Mart is making to lure more affluent consumers. When you think about its fundamental proposition, Wal-Mart should the sensible shopping alternative for most people. What Wal-Mart has failed to recognize and change, though, is that the fundamental barrier they have to expand their franchise is not advertising or assortment. It is the absolutely sordid shopping experience you have to endure at the place. The dark, disordered shops, the excruciatingly long lines and the dwindling numbers of under-paid, over-worked and apathetic associates who can't tell you much more than the time of the day. Unless Wal-Mart seriously addresses the shopping experience it delivers, those horrified looks will not go away.

Feb 01 08:45 PM

[Tradememe:]

It's not flashing any kind of bling that is suddenly very taboo. It's flashing any kind of bling when you go to the government to beg for money that is taboo.

Feb 01 11:11 PM

[Carlos Port...:]

Tradememe, the two articles I linked to originally aren't showing up, but they discuss how everyday people (but with tons of money) are buying things at high-end stores and asking them to be wrapped in plain bags that don't say "Look, I just bought a new bag at Louis Vuitton!"

It's just interesting how things are changing so quickly. Before, people saved those bags to show off to their friends how "well off" things were.

No longer.

Feb 02 10:46 AM

[Carlos Port...:]

Oops, the articles are indeed there! My fault! I just couldn't see the hyperlink until I hovered over the text.

Feb 02 10:49 AM

[MBNick:]

walmart go upscale? With filthy stores and rest rooms, no educated help, crappy merchandise including plastic meat and pre-spolied produce? I think not. Plus their pandering to minorities and high criminal activity is hardly going to allow them to go upscale.

Feb 03 10:24 AM

[makemehappy:]

Wal-Mart going upclass! I hope they give up on the idea. Those uptight, rich class can keep going to there gucci stores as long as they are open,(dropping like flies). I am a middle class American and proud of it. As far as the rich people who walk around with a corn cob up there ass who think they are better than any one else, Stay in the big city, and I hope you get hit by a bus. Your wasting my oxygen anyway!

Feb 03 11:08 AM

[User 351417:]

Interesting. Dress down, put on your dark glasses and head to Walmart with a wad of cash in your pocket.

Recently I was at a discount furniture center where the saleslady told me they are getting more and more upscale shoppers who pay extra to have household loads of furniture delivered in plain ol' white non-branded trucks. Into the ritzy neighborhoods... makes it hard to keep up with the Joneses when you don't know where they shop.

Feb 05 09:00 AM