Wal-Mart's Diffusion: A Slowly Blooming Flower
It is useful to contrast Wal-Mart with Kmart, as both opened their first stores in 1962. Wal-Mart, from the very beginning, was different from Kmart. Wal-Mart built up its store network gradually from the center out; Kmart (and Target, for that matter) began by scattering stores all over the country. Early on, Wal-Mart focused on logistics, with things like daily deliveries from its distribution centers, early adoption of advanced communication technology and so forth. Kmart did not do these things. A customer going into these two stores might not be able to see much of a difference between the two stores. But underneath, in the way that merchandise was getting on the shelves, these stores were very different.
I don't think that Wal-Mart's logistics strategy was appreciated at the time. Its model, now being replicated by others, was a new model.
From an interview with University of Minnesota economist Thomas J. Holmes in the Minneapolis Federal Reserve's "FedGazette" on Wal-Mart's location strategy.
Watch an incredible video of Wal-Mart's entire year-by-year diffusion path and location strategy throughout the United States, beginning in Arkansas in 1962.