Why Wal-Mart's Bribery Scandal Won't Matter to U.S. Shoppers

The Wal-Mart bribery scandal, which first broke in April, continues to unfold.
This week, The New York times exposed more sordid details on how Wal-Mart’s Mexican division bribed government officials to secure building permits in the country.
The world’s largest retailer is no stranger to controversy, but will its latest tale of corporate misdeeds finally be the straw that broke the camel’s back, turning off consumers, and even deterring some from shopping Wal-Mart’s ubiquitous stores? Probably not, branding experts said.

“My take is that consumers in the U.S. don’t care,” Robert Passikoff, founder and president of research consultancy Brand Keys, told Forbes.
Wal-Mart has weathered public attacks for everything from its allegedly discriminatory hiring practices and anti-union stance, to more recently, its workers’ health care policy, he said.

That doesn’t mean Wal-Mart consumers don’t consider the retailer’s actions unsavory. But they’ll say, “’it isn’t right,’ and still go there to buy something three-for $2.99.”
Company misdeeds tend to do more damage to higher-end brands, Passikoff argues.
For one, “People have different standards for a department store than they do for a discount store. This would be more hurtful to a Bloomingdale’s.
“Dealing under the table” makes more of an impression on shoppers as you “move up the value scale,” so the fallout of a company misdeed  “would be [even] worse at a Tiffany or Cartier,” he said.

Shoppers’ Short Attention Span
Even when a corporate scandal has the potential to do harm to shoppers or their loved ones, they often fail to make a meaningful mark on consumers’ buying habits, said Candace Corlett, president of marketing consultancy WSL Strategic Retail.

“What history has shown us time and again is that shoppers have short memories when it comes to retail scandals or product recalls, and rarely vote with their wallets,” she said.
“A story that should have made a lasting impression on shoppers was a few years ago at Christmas regarding the lead in toys that were made in China. In spite of all the headlines about child safety, there was no long term impact from this scare, and most toys are still made in China,” Corlett said.

Hence, “it is unlikely that U.S shoppers will think twice about spending in Wal-Mart because of a scandal over stores in Mexico.”

Wal-Mart has largely withstood damage to its public image,  in part, because many of the company’s conservative values are in line with those of its core shopping base, Howard Belk, CEO of Siegel + Gale, a branding firm that counts retailers and consumer products companies among its clients, told Forbes. For one, “there are a lot of people who are not sympathetic to unions,” he said.

Regardless of bad press, for many Wal-Mart shoppers who live on a tight budget, the retailer’s message is about “empathizing with people’s lives, offering savings everyday, and they [believe Wal-Mart] gets what they’re dealing with, which is making ends meet and living paycheck to paycheck,” a starkly different branding message than rival Target, which caters to a higher-income consumer, Belk said.

What’s more, much of Wal-Mart’s financially strapped shoppers “don’t have the luxury” to worry about  the moral compass of the stores they shop, he said.

www.forbes.com