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Big-box-store Götterdämmerung?

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Tuesday, Oct 24, 2006

I wish I could remember where I saw it, but I read somewhere that Borders, the book-store chain, was seeking new growth opportunities in opening smaller stores (”Borders Express”) that sound a lot like the Waldenbooks and B. Dalton Booksellers mall storefronts that the big-box retailer originally stole market share from. Originally, in what was the opening fusillade of the long-tail revolution, big-box stores opened to suit the modern customer whose needs—yours, mine—were far too recondite to be served by some puny mainstream mall store with its limited selection and plebian emphasis. At Borders I could expect to buy books by Althusser and Badiou; not so at Waldenbooks, where they were crowded out by the likes of Danielle Steele and John Jakes. The zeitgeist through the late 1990s was in keeping with this; customers needed superstores to accomodate their esoteric, unique-seeming needs in just about everything—books, music, electronics, housewares, hardware, bedsheets, containers, gourmet foods, you name it. And the mother of all superstores, though approaching it from a different ideological angle, is Wal-Mart—Wal-Mart doesn’t cater to our special needs so much as provide one-stop shopping and a sense that the prices are unbeatably low, and these two things compensate for the inconvenience of dealing with the carnivalesque atmosphere, the crowds, the understaffed cashier lines and so on. (It was left to Target to merge the Borders ideology with the Wal-Mart ideology, and provide spruced-up commodities and designy versions of utilitarian goods that invited us to imagine ourselves as curators of our own personal household museum.)


But perhaps the zeitgeist is changing, and consumers don’t want big-box stores anymore. Perhaps there are cyclical movements in shopping environments as there are in fashion, and the particulars are ultimately just as arbitrary. We prefer something different for the sake of its difference after a while, and this plays out in the sudden exhaustion of a huge company’s business model. The WSJ has a front-page article today about Wal-Mart, for the first time in many years, scaling back its expansion plans, as it appears it has saturated the market.


Wal-Mart’s modest shift in strategy suggests the giant discounter, which has been increasingly constrained by its own size, may be heeding Wall Street’s urging to pay less attention to growth and put more emphasis on returns. “This tells me that Wal-Mart is willing to look at their business model from a fresh perspective,” said Deutsche Bank analyst Bill Dreher. “They are not just mindlessly continuing on the same focus that they’ve had for years.” The shift is also an acknowledgment of the pressures that have buffeted Wal-Mart from all sides this year.


So the relentless effort to drum up negative coverage of Wal-Mart is possibly starting to trickle down to average Americans, some of whom are now willing to work a little harder to avoid the Wal-Mart stigma. This is the consequence of the company’s trying to expand into suburban, culturally more-liberal areas: “As it ventures beyond its rural base into urban markets, such as San Francisco’s Bay Area, Boston and Chicago, Wal-Mart also is encountering heavy resistance from community activists and local politicians who object to its low wages and other employment practices and say it poses a threat to local businesses.” The poltical blowback is an externality that perhaps hadn’t anticipated, and suggests why our collective whining isn’t entirely trivial. It may have the larger impression of creating a negative brand impression that makes it way back and erodes the company’s core customer base.


Also, it may be that the company has filled the country with all the Wal-Marts it can handle, and now the tide must recede. “In regions like the South, where it already reigns, its new stores are increasingly siphoning sales away from older ones.” It’s comforting to imagine that there’s a limit to how far the blandification of America can go, that this could mean the transformation of country roads into strips of giant warehouses of retail goods with their attendant parking lots might be coming to an end. But that’s just a fantasy—whether the boxes are big or small, the stores need will need brand names to comfort wary consumers and guarantee their feeling of having participated in something larger. The days when local idiosyncracy was generally tolerated has long since passed.

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