WAL-MARTING

Alex Knapp has an interesting post about the virtues of the Wal-Marting of America.

There’s not much doubt Wal-Mart is more efficient than any of its competitors. As the article states, they have the power to blackmail suppliers into offering rock-bottom prices unavailable to other stores, including the mom and pops. So, for commodity goods (those that are identical wherever you go), no one can really compete with Wal-Mart other than the emulators–other gigantic chains like Target, Home Depot, etc.

There is something of a down side to all this, though: We give up customer service for cheaper products. Whereas a local merchant cares very much about pleasing customers, none of the “associates” at Wal-Mart has any incentive to care. It is rare that you can find anyone who has any expertise in their products to offer comparative shopping advice, you have to wait in long lines to return defective products, have to walk miles around a poorly-organized warehouse building to buy things, and otherwise become more of an automaton. People who would have owned their own little store or been a manager at someone else’s store now wear blue smocks and become “associates” of the corporation; rather than being “somebodies” in their community, they are now lowly service employees. Or, they have to figure out a way to exploit a niche Wal-Mart can’t, in a more service-oriented sector.

This isn’t to say Wal-Mart is bad, just that there are trade-offs involved. Personally, I shop at Wal-Mart or Target for commodities when I can in order to get lower prices. But it can be a frustrating and, frankly, dehumanizing experience sometimes. I very seldom have bad experiences when I deal with proprietor-operated establishments; I seldom have good ones at Wal-Mart.

FILED UNDER: Economics and Business,
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. I think a bigger concern is that eventually, when Wal-Mart has no real competition, their prices will rise–and we’ll have lost the game completely, as we’ll have higher prices and lousy customer service. Shareholders will insist on ever increasing profits, and eventually the only way to do this will be to rake in more dough.

    The problem I have with the “bigger stores are inherently more efficient” argument is that it argues against competition and for monopolies. Monopolies have yet to be shown as a positive for the consumer (witness Micro$loth)… at least in the long run.

    For me, customer service speaks volumes over price. I’d rather pay a bit more and be able to return broken items without being treated as a criminal… and the local Wal-Marts are usually a mess best avoided.

  2. Ursula says:

    It’s not Target, it’s: “Tar-jeh.”

  3. MommaBear says:

    There are even more dirty tricks about how they deal with suppliers than were covered in that article; about two years ago there were some VERY ugly practices on the part of WalMart that were exposed!