Wal-Mart decision to eliminate the merchandise layaway program and off-the-bolt sales of the fabric could be due to the big risk that was involved. The merchandise layaway program was costing more to the company and only few people were using it (Linn 1). The programs left Wal-Mart with merchandise that could have been disposed during the peak season where they are largely demanded. Managing the off-the-bolt sale program was also very costly and the hassle involved was not appealing. Wal-Mart decision to eliminate these programs was also because of the broader market that was to be attracted by the trendier clothes they were replacing with. The fabric sale was declining which meant less profit to the company (Linn 1).
Customer most impacted
The customer who was most impacted by the decisions were the loyal Wal-Mart customers who were not very rich. It was a big blow to them and they really felt the pinch. The program assisted the locals mostly in the rural areas. They only paid the down payment and the rest of the amount was paid in a period of time. These were the customers who used to buy the traditional merchandise, school uniforms and holiday gifts. They relied on Wal-Mart because of its low price and they were able to honor their pledges within a set period of time (Gereffi 10).
The decision to eliminate the product offerings would have negative as well as positive impacts to the customer. On the negative impact, the customer will have to pay more for the same product elsewhere (Vance 12). Some of them will have to dig deeper in their pockets to get these merchandise. Others will have to travel far in case Wal-Mart was the only store providing this merchandise. This will affect the rural communities mostly because they used to rely on these stores. On the positive aspect, customers may realize and notice that they can get some merchandise at a cheaper price elsewhere. This comes as a result of lack of previous option and they end up inquiring the merchandise on other available stores (Linn 1).
Effects on other segments
The holiday segment may have a decline in sales therefore affecting profit. Most of the loyal customers that used to buy the merchandise in the store may end up looking for other alternative options. They may retain some of the clients who used to buy school uniforms in the store. Some may look for other options on how to acquire them (Gereffi 20). They may also reduce the cost because customers will have new ways of making payments to the company. Loyal customers may still be retained because of the trust they had on the company. They may have to come up with new measures to ensure they still acquire the merchandise. They can start saving for the merchandise so that they can buy them once. The replacement of the fabric segment, the party supplies, will get new customers. This will widen the market for the store (Vance 8).
Impact on the rural community
The rural community is mostly affected compared to the urban areas (Linn 3). This is because most of them are retirees who are very old and cannot afford the merchandise if they are very expensive. They had a program they used to acquire goods with, but it is no longer available. The replacement of the fabric in the urban areas can be comprehensible. In the rural areas, sewing is mostly done and replacing the fabric sale with party supplies does not make sense at all. The economically depressed rural community may cause the rural people to stop buying the merchandise or reduce their budget on the same. The urban residence may be impressed with trendier clothes more compared to the rural community. The urban may also have ways of acquiring themerchandise unlike the rural community. Urban areas have more than enough stores to buy the same merchandise.