I just discovered Laura Ries' blog, after getting a copy of the book "The Origin of Brands". I'm still going through the older posts, which is why I'm hitting something from March. She highlighted a new store idea that WalMart is exploring - an attempt to move upscale:

In Texas, Wal-Mart opened a new store today to see if they can entice customers with a more glamorous layout, snazzy employee outfits and 1,500 new premium-priced goods. All this with the Wal-Mart brand name.

It’s true! The new store has hardwood floors, halogen lights, a sushi bar, and $500 bottles of wine. Employees will ditch aprons and don navy Polos and khakis.

She's skeptical about WalMart succeeding with that, and so am I - when you think WalMart, you simply don't think "high end". It reminds me of some of the confusion at ParcPlace-Digitalk and ObjectShare before the end back in the late 90's. After Java was released, management panicked, and decided that we had to have a Java toolset. I argued against that at the time, saying that it defocused us from our core product. That point was hammered home to me (and a sales manager who was stunned by this) on a customer visit. We went to an existing Smalltalk customer on Wall Street, and talked up our new Java tool. His response spoke volumes - "I may well be interested in java, but why would I buy it from you?"

The bottom line was, we were a Smalltalk company, and no one was going to take us as a "Java company" or as an "Object company". Which is where WalMart is going to fail with the attempt at a luxury position. No one sees them that way. Inexpensive clothing? WalMart. Expensive, marked up stuff that you buy to impress others? Nieman Marcus.

In short, the person who wants to boast about their conspicuous consumption isn't going to point at the new gadget in the kitchen and announce "I got that at WalMart!"