For years, Wal-Mart has become the go-to whipping boy for people looking to criticize capitalism.
Whether the focus has been on the chain's often-tacky merchandise, its tendency to stock its shelves with Chinese-made products, or its occasionally deplorable employee relations, Wal-Mart has been an easy symbol for brutal corporate slavemasters and commercialism gone amok.
Ironically, this fits beautifully with Wal-Mart's marketing model: Whereas one once had to search far and wide for examples of America's failings, the chain conveniently placed them all under one roof, transforming itself into a one-stop shop for cultural snobbery.
Cultural critiques, however, are a rich man's game, and the financial crisis has massively reduced the number of retail snobs who can afford to stand on principles. Wal-Mart's key demographic, people who are living from paycheck to paycheck, has recently grown by leaps and bounds, and the retailer is meeting its new customers with open arms.
One way that Wal-Mart is adjusting to its new patrons is by addressing the classic critique that its products are generally cheap and low-end.
As WalletPop's Laura Heller recently noted, the chain now features expanded offerings from companies like Dell, Palm, Apple, Danskin, and Kitchen Aid. For affluent (and formerly affluent) customers, these well-known names will be a comforting presence.
More importantly, when the economy recovers, the chain is hoping that its new customers will remember where the best deals are. The same goes for its much-touted Miley Cyrus/Max Azria clothing line, which combines a popular Wal-Mart retail icon with a high-end fashion designer.
One common complaint about Wal-Mart is that its tall, narrow aisles often convey the slightly threatening impression of a warehouse store or remainder shop. In an attempt to combat this disturbing feel, the retailers is experimenting with wider aisles and lower shelves. While this reduces its amount of retail space, it conveys a more attractive presentation to upscale customers. Wal-Mart is banking that the trade-off will ultimately prove profitable.
While Wal-Mart is often cited as an example of capitalism at its worst, the chain is also a demonstration of capitalism at its best.
As any regular Wal-Mart shopper can attest, the company constantly adjusts its actions based on a single, simple bottom line: What sells stays, and what doesn't sell goes. Products are cycled through quickly, and shelf space is rapidly allocated to products that do well.
This, incidentally, also extends to policies: If good employee treatment ever becomes a customer priority, Wal-Mart will quickly work on turning into an exemplary employer. In the next few years, it will be interesting to see if the store's newly-minted customers will have an impact on its policies.
Take the first steps to building your portfolio.View Course »