The Wal-Mart Effect

I was recently at a BBQ and stood by the grill for a while watching a football game on a flat panel TV.  It was tucked under the roof of a sort of gazebo which also housed the grill, a counter, and a sink.  I asked the owner of the house if he was concerned about the elements getting to the TV.  He said, “It’s like  $200 and it’s been there for a few months already.  Maybe I only get one season out of it.  An outdoor TV costs like 3 grand.”

This is classic Wal-Mart Effect.

If you know nothing about maintaining a mower, Wal-Mart has helped make that ignorance irrelevant: At $99.96, $122.00, or even $138.00, the lawn mowers at Wal-Mart are cheap enough to be disposable. Use one for a season, store it, and if you can’t start it the next spring (Wal-Mart won’t help you out with that), put it at the curb and go buy another one.  That kind of pricing changes not he just the economics at the low end of the lawn-mower market, it changes expectations of customers throughout the market.  Why would you buy a walk-behind mower from Snapper that costs $519.00?

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