Monday, September 20, 2010

Walmart, Midnight, the last day of the Month...why is the store so crowded? The answer enclosed--you might be surprised.

     Walmart, midnight, the last day of the month and people roaming around...no it is not a chance to get a photo on the website "the people of Walmart".  But there is an interesting social phenomena occurring that dovetails with economics. Walmart has taken notice that people are shopping around 11:00pm and checking out just after midnight on the last day of the month because that is when electronic transfers of credits to benefit cards take place.  In macroeconomics these are called PUBLIC TRANSFER PAYMENTS.  This is certainly not a new thing happening but Walmart notes it is obviously much more prevalent during the recession.  Another nugget of info from the passage below is Walmart apparently varies the size of "value packs"--larger during the first part of the month and smaller towards the end, presumably because people have fewer credits and or actual dollars at that time. Catering to the customer and their situation---good business!  I did not know this was a marketing technique.  Guess I should have known, Walmart knows everything... 

Watching Walmart At Midnight

Bill Simon, CEO of Wal-Mart’s U.S. business, at a Goldman Sachs conference last week, on behavior at a Walmart store around midnight at the end of a 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. And to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.
“And you need not go further than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs,and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.
“And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason.”
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