The “hourglass economy”, WalMart and “fishing equipment” assortments

An interview with Stephen Quinn, Chief Marketing Officer at Walmart, in Fortune (Dec 26,2011) describes the “hourglass economy” in the US in 2011, with a decrease in the size of the middle class, lowered spending capability for the lower percentiles and continued robustness at the top income levels. The impact – the need for a wider assortment with different price points to serve this customer base. WalMart’s experience in the fishing aisle describes the danger in cutting assortments – at some point customers forget the existence of a fishing aisle at the store. What other consequences will the hourglass economy have on retail supply chains ? Given the difficulty in predicting demand in such a context, how should retailers manage margins across the SKUs offered to maintain profitability ?

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About aviyer2010

Professor
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