Posts Tagged ‘Wal-mart’
In the era of stretching a paycheck, generic brands have moved from the fringes to the mainstream. Every day people consider the value of purchasing a ‘non-brand’ when visiting a supermarket, or big box retailer like Costco, Target or Wal-Mart. What people might find surprising (it was to me) is that a generic brand does not necessarily mean the product will be less expensive than the ‘name’ brand.
Wasn’t the whole idea behind generic brands hatched as a way for consumers to pay less while the store could keep a greater share of the profit? An article in Tuesday’s Wall Street Journal http://on.wsj.com/AbOAMK offered some interesting thoughts regarding store brands. It seems at times people actually prefer the store brand to the more established name brand. And they are even willing to pay more for the store brand. What the heck is going on here?
When I shop and consider a store or generic brand versus an established brand I go through the same checklist that I’m sure is the same as many people. If I decide to buy generic or store brand paper towels my expectations are lowered a bit (thinner ply and not as absorbent) but will only buy if the price is considerably lower. Sometimes it is lower, but sometimes the name brand is having a special and the value is better. It rarely (if ever) enters my thinking that I would prefer the ‘private label (fancy name for store or generic) brand.
From the WSJ article:
‘Private-label products still cost an average of 29% less than their nationally branded counterparts. But they are rising faster in price, at a rate of 5.3% last year compared with the industry average of 1.9%, and can sometimes be the most expensive product in a category, according to market-research firm Symphony IRI.
Target’s two-pound jars of Archer Farms roasted almonds, prominently displayed on the end of the nut aisle, recently cost about 16 cents more per pound than Planters’ roasted almonds.’
That Target has been able to create a store brand that costs more than the established brand impressed me a great deal.
The article also noted that Procter & Gamble Chief Executive Bob McDonald said the maker of Pampers and Tide has been balancing its exposure to chains with store brands by expanding distribution in other channels like dollar stores, which don’t sell private labels that compete against P&G products. They are also redoubling efforts to develop new products, particularly at lower prices. “We invest $2 billion a year in research and development, $400 million on consumer knowledge and about 10% of sales on advertising,” Mr. McDonald said in a recent interview. “Store brands don’t have that capability.”
Sounds like someone who is not sure but is hoping he’s right.
Is this a wake-up call for traditional established brands?
One story that caught my eye last week was the one reported last Thursday http://nyti.ms/cdKHnH where Wal-Mart is planning to offer eligible employees 15% price reductions on college tuition at American Public University (www.apus.edu) which is a for-profit online university. This would go for Sam’s club employees as well.
Most of the time Wal-Mart seems to me to be the company that people love to disparage and even hate. With more than 1,400,000 employees (a number that always staggers me); Wal-Mart has to think about building a better workforce. Making college more affordable is an excellent way for Wal-mart to help people help themselves, while at the same time perhaps improving the performance of current employees.
The article notes that ‘with the work credits and tuition discounts, an associate’s degree for a Wal-Mart or Sam’s Club cashier would cost about $ 11,700 and a bachelor’s degree about $ 24,000. While those aren’t incidental costs they are a far cry from what a college education will cost in the United States currently at most 4 year universities.
Many people are of the opinion that education is the key to helping America and Americans stay competitive – and I fully agree with that opinion. Online universities are increasing in popularity for the obvious reason that they are substantially less expensive. Of course the college experience is vastly different from the campus environment that young students enjoy when they attend a 2 or 4 year university or college. The choice for many people today is not to go to college since they cannot afford it AND they could not make the time for it even if they could find a way to pay.
Wal-mart has hit on something big here. The time people spend online increases with each passing day. Offering a college education online is truly a win-win and speaks to the adage (and I paraphrase) – ‘if you want to catch fish you have to go where the fish are’. 1,400,000 employees represent a fine kettle of fish.
I like the idea a lot – how about you?
I heard a radio spot yesterday from Barracuda Networks. Their offer is to help companies make their workers more productive by blocking/firewalling them from websites and social networks that (as the ad infers) detract from employee productivity and company profits. Their ‘solution’ is to have companies employ their product as a step on the road to productivity. It’s a blatant scare tactic and the barracuda is a pretty scary looking fish after all.
It’s nearly a certainty that there are some business owners and/or managers that will consider this approach as a salve for some of their business problems. I’m not one of them in any way. Walling off employee access to certain websites and social networking is simply a terrible idea.
The idea of restricting access during the workday in order to ‘get people back to work’ will quite possibly have the opposite effect. Pretty soon companies that take that tack will ask employees to leave their mobile devices at the door when they come to work. After all many people now can adroitly access the web and social networks from their iPhone or other smart phone. Take away the websites and social media check-ins and employees will spend more time trying to find a way around it. So exactly how will that approach make things better?
Companies that restrict internet access are telling their employees – ‘We don’t trust you’. “We don’t respect your ability to make appropriate choices on how you spend your time during the work day.” And what kind of bright young minds would be interested in joining a company that approaches its business in that manner?
I’m not so naïve that I think employees always act in the most productive manner every minute of the work day. But is that really the goal of an employer? No I don’t wish that members of our team spend 3 hours a day on Facebook, LinkedIn or looking for a job on Monster or Career Builder, (apparently we had one that did that while here). But I ask those companies that think restricted access is a good idea – do your employees receive and respond to emails before and after the workday? On weekends? For many companies including ours the answer is an unequivocal yes. Granted our company is a smaller one with less than 25 people. But even if we were the size of, oh say Microsoft or Wal-mart, would the restriction of access to the web create a better and more productive working environment?
My take is if you cannot count on having smart, motivated people on your team who know the difference between what is appropriate and what is not, then you have the wrong team in place. It can sometimes be the job of managers to teach employees the difference if they don’t know it already. But forbidding access and censoring sites sounds a bit China like to me.
I wouldn’t want to be a part of a company like that – would you?