Essay 4155

Advertising Age’s Rance Crain offered advice to Wal-Mart. Zip through Crain’s inane suggestions, then read the brief MultiCultClassics response…

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Forget Going Upscale -- Wal-Mart Should Serve Needs of Poor, Seniors

Two Ideas to Help the Company Everyone Loves to Hate

By Rance Crain

Two disparate events -- the subprime-mortgage debacle and the children’s food showdown -- could provide welcome relief for beleaguered Wal-Mart.

The company everyone (except its loyal customers) loves to jump on has a big opportunity to do good for a big swath of its shoppers while also doing good PR for itself.

Wal-Mart has been unsuccessful in doing many things of late, such as trying to put stores where the local populace doesn’t want them and expanding into more upscale merchandise, so the giant retailer should concentrate on servicing its core constituency -- people who really need Wal-Mart to live a decent life.

The subprime-lending area cries out for Wal-Mart’s help, yet it’s been blocked from getting into banking services at its stores. Wal-Mart wanted to offer its consumers a full range of financial products, including deposits and withdrawals. Under opposition from banking and credit-union groups, Wal-Mart withdrew its application to open a bank and said it would instead introduce financial instruments through third-party partners.

Serving the poor is a big market, and providers like to say how proud they are to give credit and debt products to people who couldn’t get them from traditional lenders. But the interest they have to pay for such services is astronomical, and many people are left holding the bag for thousands of dollars in interest or being unable to pay their mortgages, leading to the current subprime-lending mess.

Wal-Mart already offers a Discover credit card to its customers; now it plans to make a prepaid debit card available to low-income consumers and expand its money centers, which handle check cashing, money order and bill-paying services, to more than 1,000 from 225.

What a great idea: Help the poor avoid crushing interest payments by giving them the option of a debit card they can reload free by cashing a payroll check or having it directly deposited to the card. And Wal-Mart is also considering some sort of interest-bearing feature, maybe on the portion of the debit card that goes unused.

Many poor people don’t understand the rudiments of financial transactions, including how interest payments of 20% and more can be assessed. So wouldn’t it be terrific if Wal-Mart were to provide literature and hold seminars on how some credit-card companies jack up rates if users pay late or exceed their limits. By using a debit card, of course, consumers aren't subject to interest payments.

My good friend Dick Criswell has come up with an idea for Wal-Mart that will take attention away from the children’s food issue and redirect it to another -- senior foods. Do you remember the horror stories of older people who were forced to eat dog food to survive? Dick’s thinking is that people in this predicament need nutritious food that’s easy to chew, has low cholesterol, sugar and salt, and is low-priced.

“Imagine that Wal-Mart picks up on this idea and launches a line of senior foods in very plain, simple packaging that carries only the big, smiling face (plus content and legal) and sells them in a special section of its food outlets under a name such as ‘Smiling Seniors.’ A lot to smile about -- quality and price you can only find at Wal-Mart.”

Dick points out there already exists the majority of the products that would make up such a line. They’re sold by a number of different food marketers in single or small-size packaging under labels such as Chef Boyardee, Campbell’s, Swanson, Heinz, Hormel, Swift, Bush’s and Kraft. But they’re not specifically targeted to seniors, and therein lies the opportunity. Maybe some of the nutritional products they make for kids can be reconfigured for older people.

And what a great opportunity for Wal-Mart to be on the side of the angels. Forget about going upscale -- Wal-Mart has greater potential serving its core constituency, the less affluent people it helps lead better lives.

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There’s an easier, better idea for Wal-Mart to embrace versus elderly edibles and financial services for the poor. Simply reallocate marketing dollars to the minority audiences that have already proven to be loyal, profitable and growing.

During the infamous Wal-Mart account review, it was revealed that the victorious White agency picked up about $580 million in billings. But the Latino agency that retained its slice of the pie received roughly $50 million, the new Black agency got about $30 million and the Asian shop probably landed a set of Ginsu® knives.

It doesn’t take a rocket scientist or Census Bureau geek to guess that minority audiences likely comprise a bigger percentage of the mega-retailer’s customers than the current segregated budgets reflect. Even the GEICO® caveman—created by Wal-Mart’s White agency—could figure it out.

Wal-Mart has always adopted an Americana image, so why not cater to the nation’s true demographic makeup? Reports indicate the mega-retailer is dumping the iconic yellow Smiley face. Maybe it’s time to bring in a broader range of faces.

(Plus, we hope Rance Crain’s appeal-to-the-poor concept was not actually intended to mean Wal-Mart should target minorities.)