Tuesday, September 21, 2010

Month After Month

The paycheck cycle we've talked about before remains extreme. It is our responsibility to figure out how to sell in that environment, adjusting pack sizes, large pack at sizes the beginning of the month, small pack sizes at the end of the month.
Bill Simon, head of Wal-Mart's U.S. operations, at Goldman Sachs Retail Conference. 15 September, 2010.
Now, I don't work at/for Wal-Mart, so I don't really know what "pack size" means, but it seems safe to assume that its simply package size - how much you receive in one bag/box/container. And so, if I'm reading this correctly, Wal-Mart is basically altering the size of things they sell based on when in the month it is. In the beginning of the month, when people have more money, the mix of large to small packs is more heavily weighted towards large which presumably have higher price tags. As the month goes on, and people have less money to spend, pack sizes and thus prices recede until the next month begins. (I'm guessing at how the system works, but this makes sense to me...)

Now, I've never been paid on a monthly cycle before, so the idea that you could set up a retail operation to work to that was news to me. But as Mr. Simon goes on to say, there are also a lot of people who shop at Wal-Mart on some sort of government assistance, and I expect that many of those systems work on a monthly cycle. Of course, one of the things about the fact that so many parts of the world are so tightly connected is that you can actually watch things like this play out without ever having to observe them directly - you can watch the disposable income of Wal-Mart customers dwindle away over the course of 30 days (give or take, of course) by watching how the shelves are stocked in the stores, which is both endlessly fascinating and tragic at the same time.

No comments: