Thursday, November 24, 2005

Chinese Take-Out
I've seen a few shows on cable news and PBS regarding Wal-Mart and whether it is good for America. Now there's a new film expose that examines the same question. I'm ambivalent on Wal-Mart. Personally, I think its a terrible store to shop in. The layout is horrible, the lighting too bright, the colors to tacky and the whole package just screams cheap and flimsy. One thing I notice in the Wal-Mart is that the merchandise is treated with total disrespect. Stuff is just strewn about - unorganized, thrown together, tossed aside. Clearly the customers don't have a lot of respect for the goods and the employees don't either. I've never seen any attempt by Wal-Mart employees to try and keep the place tidy. Go to Old Navy or some clothing store and you always see an army of clothes folders carefully putting back the merchandise in presentable shape. But at Wal-Mart its like walking into one big bargain bin of old cassette tapes. You got to sift through the stacks of Kenny Loggins and Styx just to find that one gem you think is out there. Its just piles and piles of crap and somehow you're convinced there's an item of substance worth finding and having.

On the question whether Wal-Mart is good for America I think the results are murky. There's the argument about the closing down of Mom & Pops when Wal-Mart moves into town. I'm not unsympathetic to that argument on a level. Then there's the subject about offshore manufacturing and how Wal-Mart helps that. Clearly American goods manufacturers and the public at large need to come to terms with the fact that the concept of "Price" includes a whole lot of things: including the value of the good itself and all the intrinsic stuff that goes along with that good - meaning when you're buying a more expensive American made good you're buying higher wages for that American who produced it; his/her healthcare, job benefits, etc.

I think American goods manufacturers as a whole need to be better at conveying the new sense of "value" to the customer that will determine their survival: for example all the things about quality, American made, buying from your neighbor, and supporting their lifestyle, job, income etc. Take Starbucks for example. People have shown a willingness to buy a more expensive cup of coffee (over cheaper competing choices offered at gas stations for example) not just for the good taste and preparation but because there's a certain value and mystique that the customer is buying into. I think on a level a customer is aware of Starbucks attention to "corporate responsibility" and its effort to source its products with fairness and to provide its employees with a living wage and attractive benefits. The customer is willing to spend a bit more because the cup of coffee is more than just brewed beans - its an expression of values and a support of values. Customers vote with their dollars and Starbucks has been successful at building a brand around this.

Organic farming and foods I think is another example of this. People are willing to spend a bit more because they perceive they are buying not just healthy food, but food that was produced according to a set of values - values they wish to support. I think this is a trend that more American manufacturers and goods producers need to turn to in this era of globalization. With such an array of choices out there for goods and services, the way to differentiate as well as to support American workers is to build a stronger brand awareness around "values" and make the case that a more expensive price buys you much more than the good itself - but all the things that went into producing that good. For example, the State of Vermont has become a brand name unto itself. Anything listed as Vermont-this or Vermont-that or Vermont made etc etc conveys a particular image of quality, care, earthiness, and strong American values. This practice needs to extend out to other American goods and industries. I think it will be the only way for American goods producers to survive and thrive and for shoppers to no longer so singlemindedly intent on shopping for low-price.


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