Wal-Mart has long been positioned as the low-price leader. Leveraging its supply chain and logistics system, competitors couldn’t match Wal-Mart’s cost structure. Now at least some consumers perceptions are changing. In this Wall Street Journal article, “Wal-Mart Loses Edge” (August 16, 2011, non-subscribers may need to click here) we read about recent consumer surveys that show the retailer losing its “lowest price” positioning. In one survey of 1500 Wal-Mart shoppers, “86% no longer thought it had the lowest prices” while in another survey the number was 60%. Whichever the number, this is a big problem for a retailer that has long enjoyed a well-deserved reputation for low prices. While Wal-Mart’s perception of value fades, stores like Dollar Tree are seeing their perception of value rise.
As you know (or will learn), consumer perceptions are what drives behavior, so if consumers no longer view Wal-Mart as the lowest price store, those looking for low prices may move on to other retailers. We use the term positioning which we define as “how consumers think about proposed or present brands in a market.”
What should Wal-Mart do now? Should the try to re-gain positioning as the “lowest price” store? Or should they seek out another positioning? What positioning do you suggest Wal-Mart pursue? How do they get it?