By George Anderson
As America's self-proclaimed #1 populist, former two-time Texas Agriculture Commissioner, author and radio personality Jim Hightower has said, "There's nothing in the middle of the road but yellow stripes and dead armadillos."
Mr. Hightower's observations about the perils of getting stuck between oncoming traffic offers lessons for the retail industry. Those operating in one lane (the high end/luxury market) have done well, while those in the other (price/value segment) have also prospered. As for those businesses that tried to stake out a middle position: let's just say that the industry has seen more than its fair share of flattened armadillos in recent years.
According to Roger Blackwell, professor of marketing at Ohio State's Fisher College of Business, higher prices at the pump and higher heating bills are pushing consumers across income segments to shop for the best price on everyday items.
"How do rich people get rich? It's not from spending their money unwisely," he told The Daily Reporter.
At the same time that they are bargain hunting on one end, consumers are also willing to trade up in other areas as a means of personal reward, according to Prof. Blackwell. For one shopper, this could mean a stop at Starbucks. For another, it could mean buying a Prada handbag, etc.
Moderator's Comment: Is there a middle way in which retailers can be successful or does the market demand merchants to stake out a position on either the price/value or luxury segments of the business?
Ellen Tolley, director of media relations for the National Retail Federation told The Daily Reporter, "There is room for a variety of retailers in the market. Some retailers are more successful than others, but that is because they pay more attention to what their customers want and they make sure to give it to them."
Prof. Blackwell pointed to Big Bear as a grocery chain in Ohio that couldn't compete on price with the likes of Aldi and Wal-Mart and didn't create an identity around other areas of the business that would have appealed to consumers. The result was bankruptcy. - George Anderson - Moderator