The company everyone (except its loyal customers) loves to jump on has a big opportunity to do good for a big swath of its shoppers while also doing good PR for itself.
Wal-Mart has been unsuccessful in doing many things of late, such as trying to put stores where the local populace doesn't want them and expanding into more upscale merchandise, so the giant retailer should concentrate on servicing its core constituency -- people who really need Wal-Mart to live a decent life.
The subprime-lending area cries out for Wal-Mart's help, yet it's been blocked from getting into banking services at its stores. Wal-Mart wanted to offer its consumers a full range of financial products, including deposits and withdrawals. Under opposition from banking and credit-union groups, Wal-Mart withdrew its application to open a bank and said it would instead introduce financial instruments through third-party partners.
Serving the poor is a big market, and providers like to say how proud they are to give credit and debt products to people who couldn't get them from traditional lenders. But the interest they have to pay for such services is astronomical, and many people are left holding the bag for thousands of dollars in interest or being unable to pay their mortgages, leading to the current subprime-lending mess.
Wal-Mart already offers a Discover credit card to its customers; now it plans to make a prepaid debit card available to low-income consumers and expand its money centers, which handle check cashing, money order and bill-paying services, to more than 1,000 from 225.
What a great idea: Help the poor avoid crushing interest payments by giving them the option of a debit card they can reload free by cashing a payroll check or having it directly deposited to the card. And Wal-Mart is also considering some sort of interest-bearing feature, maybe on the portion of the debit card that goes unused.
Many poor people don't understand the rudiments of financial transactions, including how interest payments of 20% and more can be assessed. So wouldn't it be terrific if Wal-Mart were to provide literature and hold seminars on how some credit-card companies jack up rates if users pay late or exceed their limits. By using a debit card, of course, consumers aren't subject to interest payments.
My good friend Dick Criswell has come up with an idea for Wal-Mart that will take attention away from the children's food issue and redirect it to another -- senior foods. Do you remember the horror stories of older people who were forced to eat dog food to survive? Dick's thinking is that people in this predicament need nutritious food that's easy to chew, has low cholesterol, sugar and salt, and is low-priced.
"Imagine that Wal-Mart picks up on this idea and launches a line of senior foods in very plain, simple packaging that carries only the big, smiling face (plus content and legal) and sells them in a special section of its food outlets under a name such as 'Smiling Seniors.' A lot to smile about -- quality and price you can only find at Wal-Mart."
Dick points out there already exists the majority of the products that would make up such a line. They're sold by a number of different food marketers in single or small-size packaging under labels such as Chef Boyardee, Campbell's, Swanson, Heinz, Hormel, Swift, Bush's and Kraft. But they're not specifically targeted to seniors, and therein lies the opportunity. Maybe some of the nutritional products they make for kids can be reconfigured for older people.
And what a great opportunity for Wal-Mart to be on the side of the angels. Forget about going upscale -- Wal-Mart has greater potential serving its core constituency, the less affluent people it helps lead better lives.