Wal-Mart Stores RV Parking

I just found an FAQ buried on Wal-Mart's web site that talks about RV parking. This is great marketing. Here's an activity -- parking one's motor home -- that would drive most retailers and other business crazy. Wal-Mart, instead of patently prohibiting the activity, embraces it, knowing full well that they will pick up tremendous sales (and goodwill) by having people temporarily "live" at their doorstep. For all the annoying things that wal-Mart has become, they didn't become the largest company in the world by saying "no" to their customers.

Singing the Same Tune

Last night's edition of Frontline was about the music industry and all of its troubles. While this could have degenerated into another gagging regurgitation of the internet file sharing controversy, the program instead focused on the overall business and how it works.

Throughout the program, there was discussion of the retail distribution channels for music and how much the big retailers dominate the business. One record company exec said that Best Buy, Target and Wal-Mart together account for 50% of music sales. As is the case with so many other products, CD's now have to please the few dominant retailers before they are readily available to the consumer.

This is yet another illustration of my longstanding belief that merchandising has become less about carrying the products that consumers want to buy and more about retailers offering what they want to sell. More and more product offerings are retailer-driven, not consumer driven.

Although the retailing giants do not operate in a vacuum -- they cannot succeed if consumers are not willing to buy what is being offered, things are very different than they used to be. Oligopoly, which is basically what we have in much of retailing today, reduces the risk of failure for the dominant players. They have the foot traffic, so as long as they meet the minimum requirements, they'll sell whatever they offer. Remember the bread lines in the Soviet Union? Do you think quality was much of an issue? (Extreme example, I know, but it's still a relevant point.)

Maybe a more realistic example is the U.S. auto industry in the 1970's. They went for years offering an inferior product -- and people accepted it because that's what was available! It took many years of pressure from the Japanese before GM, Ford and Chrysler woke up and realized that consumers will, when given the choice, respond to better products when they are readily available.

Ultimately, I think many categories of retailing are on the same path. Sure, there are new factors like internet shopping, but I still believe that history will repeat itself. They only question is when.

Five years from now...

Interesting predictions from Seth Godin. They made me think...

Hard drive space is free

It's easy to see this happening already. Google's new gMail and Yahoo Briefcase are good examples. It's also remarkable how many places will host your images and other files for free.

Wifi like connections are everywhere

Yes, but with more and more Blade Runner/Minority Report-like advertising messages.

Connections speeds are 10 to 100 times faster

That would change everything. I wonder how much of today's hardware will be able to keep up with that. My hunch is that people are keeping their computer hardware longer. Are there any infrastructure barriers to this as well?

Everyone has a digital camera

No brainer. The camera is morphing into a device that is integrated into all kinds of other device platforms -- phones, PDA's, computers and camcorders.

Everyone carries a device that is sort of like a laptop, but cheap and tiny

I never would have believed that PDA sales would start tanking the way they have. Mine is indispensable. I guess they just don't improve productivity enough for many people. Whatever the replacement is, it will have to do a better job if it's going to take root.

The number of new products introduced every day is five times greater than now

At the rate things are coming out of China, it wouldn't surprise me. The growth in skilled product development and implementation there is mind boggling.

Wal-Mart's sales are three times as big

That's about 25% growth per year. They should easily get almost half that from their growth in the US. Factor in their international opportunities, and this is very doable.

Any manufactured product that's more than five years old in design sells at commodity pricing

This is almost true already. The Bose Wave Radio is the only exception I can think of off hand! Seriously, though, the product life cycle keeps getting shorter and shorter.

The retirement age will be five years higher than it is now

Will it really add a year each year? That seems a bit aggressive. Regardless of how fast it changes, people will certainly be retiring later and later in life.

Your current profession will either be gone or totally different

It's amazing how much it has changed in the past five years. Being in the CPG business, the rate of change is palpable. Our company figures that in five years, half of our current sales channel will be completely gone. We have five years to replace half our sales volume, or we're gone too.

State Tax Receipts are Rising Again

I just read a report that state income tax receipts have steadily improved over the past few months. Yet another encouraging sign that the economy is growing at a healthy pace. I've seen amazingly little coverage of this in the media. A search on Google News turns up a handful of articles including this one. As the coffers are refilled, I have to wonder how many states will rescind or reduce the tax increases they've enacted over the past couple years. With few exceptions, I bet they won't. Spending will rise to fill the gap long before any tax reductions pass through the legislatures.

Always a Low Price. Not Always a Credit Card.

I heard something interesting about Wal-Mart. Over 100 million people shop at Wal-Mart Stores each week. Not a big surprise given how many stores they have. Amazingly, though, only 50% of these customers have credit cards. Given that the US population is 300 million and 190 million people carry credit cards, I am having trouble with the math. If true, this implies that virtually everyone in the country who doesn't have a credit card shops at Wal-Mart and those with credit cards are more likely to shop elsewhere in any given week. With that many customers each week, one would think Wal-Mart's customers would look more like the general population.

First Post

Well, this is my first post. Still not sure what I'm going to do with this, but blogging is really, really cool. At least I think so. Stay tuned!