It's the Customer, Stupid!

june 5, 2005

Motley Fool has a great article on retailers and how some retailers (read as: Wal-Mart) have lost track of what is important (customers) and instead have focused on short-term earnings reports (cost cutting). The article does mention two retailers (that I shop at frequently) which have prospered by focusing on the customer: Target ("tight customer focus") and Costco ("finely tuned read of what the customers want"). For proof, check out the TGT vs WMT stock comparison. Target's stock, even as they focus on the customers, continues to climb in the last two years, were Wal-Mart has seen its stock decline some 20%. The same can be said when looking at COST vs WMT. Wal-Mart has lost its way, focusing on "low prices" and driving down costs at the vendor side. They seem to have forgotten why they are around, as I quote "It's the Customer, Stupid!"