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October 3, 2007
Innovation Wednesday: Wal-Mart Surpasses Goal to Sell 100 Million Compact Fluorescent Light Bulbs Three Months Early; CEO H. Lee Scott Celebrates with Some Hamburger Helper.
Wal-Mart, take your victory lap.
Wal-Mart announced yesterday that the company has blown past an ambitious goal of selling 100 million compact fluorescent light bulbs by the end of 2007 -- three months early. This is no small deal for the Arkansas based retailer, or the environment. Over the lifetime of the CFLs, Wal-Mart estimates that these energy-saving bulbs will have the effect of taking 700,000 cars off the road or conserving the energy needed to power 450,000 single-family homes. And although the swirly bulbs are pricier (at least for now) than their incandescent cousins, Wal-Mart customers can save up to $350 a year on average by making the switch, the company says.
Wal-Mart CEO H. Lee Scott clearly deserves a lot of credit for this. To understand the impact of his decision to make CFLs a priority for Wal-Mart, I’d recommend re-reading my pal Charles Fishman’s award winning analysis, How Many Light Bulbs Does It Take To Change The World? Not only does Fish do the detailed math of what the bulb means for the consumer and the environment, he tells a nail-biter of a story of how Lee Scott convinced GE's Jeffrey Immelt to radically disrupt GE's own light bulb business. Fish writes: “Once Wal-Mart decides to make swirls an important product, the appeal for GE also becomes clear. It's the power of the big dog: GE can either help Wal-Mart sell swirls, or some other lightbulb company will. In either case, GE's regular-bulb business shrivels.” Tough call. We now know who won. Everybody.
Posted by Ellen McGirt at 1:00 AM
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4 Comments
July 13, 2007
CEO: I Am Rubber, You Are Glue
John Mackey, the vegan pulling down $1 a year as head of $5.7 billion company Whole Foods, the organic/natural/crunchy/gourmet chain, is taking a lot of FTC anti-trust-flavored heat for posting anonymously -- for years -- on a Yahoo investing forum about his company's own stock. Besides routing for the home team under screen name Rahodeb (Mrs. Mackey, don't you feel flattered?), Mackey also talked a heck of a lot of smack about competitor Wild Oats, the Wall Street Journal reported yesterday in a front page story.
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It gets a little more complicated: Whole Foods has found itself embroiled in an antitrust case for trying to merge with Wild Oats, that same company Mackey had described as "floundering" and a whole lot of other things in previous months online.
Oh, John. Couldn't you have just deployed a PR peon to sing your praises on the silly message board?
Despite the odd revelation yesterday, Whole Foods' stock picked up a little over 3.5 percent today on NASDAQ.
At first glance, this might look like a woefully regrettable mistake on Mackey's part. At minimum, it's certainly embarrassing, and at worst, it could help kill the deal with Wild Oats.
But on closer look, it's a very nuanced case, and the implications aren't clear. Mackey posted information and opinions about his and other businesses, but all of his posts were anonymous (though some on the boards suspected his identity).
It's certainly a faux pas, but does what Mackey did count as foul play, or was it merely "fun," as he describes it?
One ABC reporter thinks it smells like deception, and compared the Mackey gaffe with last year's controversy over the Wal-Mart fan blog that was exposed to have been funded by Wal-Mart's very own PR firm, Edelman. But is it really a fair comparison? When you put the Wal-Mart case next to Mackey's furtive forum posts, I think there's something a lot more sneaky to me about a big PR firm secretly backing what's made to look like a homegrown website.
The jury on the FTC case will be out for a while, which means we've got some time to render our own judgments. (Whatever happens, Mr. Mackey, I love those free fruit samples at my store in Chelsea - keep 'em coming.)
UPDATE: Mackey's sorry.
Posted by Elise Waxenberg at 4:51 PM
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March 19, 2007
Going Green to Get Your Green?
Word has come out that Wal-Mart will be asking electronics suppliers to keep track of the environmental impact of their products. Manufacturers will fill out sustainability scorecards that the mega-retailer will distribute to customers, starting in 2008.
As the house the Sam Walton built continues to embrace green wares and sustainable practices, such as the move to embrace compact fluorescent lightbulbs and organic produce, will customers respond? Will eco-friendliness, besides helping their PR image, help sales?
Posted by Kevin Ohannessian at 2:42 PM
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February 6, 2007
Wal-Mart Enters a New Digital World
Wal-Mart entered the downloading realm today by offering movies and TV shows online, but without the usual advantage that the retail store has--low prices--will the endeavor succeed?
You can now purchase a movie digitally from walmart.com and they will download onto your hard drive. The titles seem considerably less than the in-store product, like "Thank You for Smoking," which retails for around $20 in store, can be downloaded onto your computer for a little less than $15. And "Ice Age 2," which has an in-store price around $17-20, will only cost about $15 for the digital version.
Continue reading "Wal-Mart Enters a New Digital World"
Posted by Ryan Derousseau at 3:16 PM
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January 17, 2007
Is Wal-Mart Really Organic?
The Cornucopia Institute, a farm policy research group based in Wisconsin has been taking a lot of shots at Wal-Mart concerning the retailer's organic food labeling practices. For one, the organization charges that Wal-Mart's signage misrepresents nonorganic food as organic. There are photos on Cornucopia's web site backing up the organization's allegations. According to The Wall Street Journal, "The organic-food industry has mushroomed into a juggernaut with nearly $14 billion in sales in 2005 and annual growth of roughly 20%," and, "food empires like Dean Foods Co. and Danone SA now churn out organic products, and Wal-Mart Stores Inc. has become a major seller of organic food."
About four months ago Cornucopia informed Wal-Mart that its misrepresentation could be interpreted as consumer fraud, and later followed up by filing a formal legal complaint with the USDA after finding that many of the reported deceptive signs were still in place in Wal-Mart stores. Cornucopia’s complaints ask the USDA and Wisconsin regulators to fully investigate the allegations of organic food misrepresentation. The farm policy organization has shared their evidence, including photographs and notes, from multiple stores in Wisconsin and in many other states, with the agency’s investigators. Fines of up to $10,000 per violation for proven incidents of organic food misrepresentation are provided for in federal organic regulations.
Wal-Mart corporate spokeswoman Karen Burke told the La Crosse Tribunel that any mislabeling was "inadvertent." “Although Wal-Mart has more than 2,000 locations that may offer up to 200 organic selections in addition to thousands of non-organic offerings, we believe it to be an isolated incident should a green organic identifying tag be inadvertently placed by or accidentally shift in front of the wrong item,” she said. “The USDA certification label is featured on the packaging of the organic selections we offer for further customer information and verification.”
This past September, The Cornucopia Institute also accused Wal-Mart of cheapening the value of the organic label by sourcing products from industrial-scale factory-farms and Third World countries, such as China. The Institute released a white paper, Wal-Mart Rolls Out Organic Products - Market Expansion or Market Delusion?, that concluded that Wal-Mart was poised to drive down the price of organic food in the marketplace by inventing a "new" organic -- food from corporate agribusiness, factory-farms, and cheap imports of questionable quality.
Is Cornucopia just picking on the big guy, or are Wal-Mart's organic retail practices really questionable?
Posted by Lynne d Johnson at 4:19 PM
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November 27, 2006
Black Friday Bolsters Retail Sales
It was a great Thanksgiving weekend for U.S. retailers, with fewer shoppers spending more. According to The National Retail Federation, an estimated 140 million people hit the stores and shopped online over the past four days, down about 5 million from last year. And Black Friday, which starts the holiday season for retailers, drew about 58.9 million people, down more than 1 million.
A similar pattern was observed on the Web. While Nielsen/NetRatings reports that 19.2 million Americans visited more than 120 online retail stores on Black Friday, up from 17.2 million in 2005, but that's significantly below a 29 percent growth in overall traffic to online retail stores from 2004 to 2005.
But with all of this spending, retailers are still concerned about consumer confidence. Considering that November sales were down by 0.1 per cent on the same month last year for Wal-Mart, the world's biggest retailer, gives some pause. It was only the second time in 27 years that Wal-Mart reported a fall in sales, and it was also the retailer's worst performance in more than 10 years.
Is Wal-Mart truly the bellwether for the entire retail industry? Should retailers have concern about Christmas spending and year-end sales given Wal-Mart's performance?
Posted by Lynne d Johnson at 12:07 PM
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October 17, 2006
Wal-Mart: This Fall’s Fashion Don’t
Wal-Mart has been trying to push its way into (relatively) high fashion for at least a year now. The store has invested in trend-spotting, offered lines from European designers and even made appearances at high profile events such as New York City's Fashion Week.
The buzz during Fashion Week was that Wal-Mart's "cheap chic" would be a hit -- that fashion is about the design, not the price. Target and H&M had pulled it off, so it made sense that Wal-Mart would now get a piece of the action. But in September, Wal-Mart reported a dismal 1.3 percent rise in sales, and the retail giant cited sluggish clothing sales as the reason.
So, just blame it on high fuel prices, a downward economy and low consumer spending, right?
Continue reading "Wal-Mart: This Fall’s Fashion Don’t"
Posted by Peter Hoy at 2:35 PM
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Wal-Mart's China Expansion Strategy
Wal-Mart appears to be in talks to make a more significant entry into the Chinese marketplace through the acquisition of a Taiwanese-owned supermaket chain called Trust-Mart, according to The New York Times reports this morning.
Moving into China is pivotal to the retailer's international strategy, as China may be the only place where the company can replicate what it's done in the U.S. Currently, Wal-Mart has 66 stores in China and is also the largest foreign retailer in both Mexico and Canada. Yet expansion in other countries, such as Germany, Japan, and South Korea has been difficult.
Wal-Mart is up against French retailer Carrefour in its bid for Trust-Mart. Carrefour currently has more stores in China than Wal-Mart, and both retailers must compete with large Chinese retailers, like China Resources and Shanghai Brilliance Group. If Wal-Mart wins out, there will still be a need to figure out its competitive advantage and target market in the Chinese marketplace -- suburban .vs urban. (As an aside, experts from Wharton and Boston Consulting Group have released a report that offers insights on how Chinese consumers are evolving as the market develops.)
A notable play in Wal-Mart's expansion in China is the formation of trade unions by the retailer's employees there, while resistance to such employee activities continues to be a practice for the company in the U.S.
Posted by Lynne d Johnson at 10:31 AM
September 21, 2006
Always Low Prices -- Is There Always a Catch?
Wal-Mart (NYSE: WMT) announced this morning that it will begin to sell 291 types of generic prescription drugs -- charging only $4 for a month's worth of prescriptions that would otherwise cost as much as $30. The news leaves me wondering why, exactly.
Wal-Mart has been assailed in recent years by consumers, the media, and activist groups for not providing adequate health coverage or high enough wages to many of its employees. The advocacy group, WakeUpWalMart.com, reports that of Wal-Mart's approximate 1.39 million U.S. employees, only 43% are covered by the company's health care plan.
So, is Wal-Mart responding directly to the longstanding criticisms of its health care policies? Are the low-cost generic drugs an answer to its employees' healthcare woes, as well as its consumers'?
Continue reading "Always Low Prices -- Is There Always a Catch?"
Posted by Peter Hoy at 4:07 PM
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September 19, 2006
An 'American Idol' Moment for Fast Company?
The Wal-Mart Effect, the bestselling book by Fast Company veteran Charles Fishman, is a finalist for an unusual new book award called The Quills. Finalists in 19 categories are chosen by librarians and booksellers. The novelty is this: the winners in each category are chosen by readers, voting online. (J.K. Rowling's latest Harry Potter installment and "Freakonomics" were among last year's winners.)
Fishman has been at Fast Company since the beginning, with a story in FC 01, and "The Wal-Mart Effect" started out as one of the most-popular stories ever for Fast Company. The book was excerpted in the magazine in January.
We wanted to take a moment to salute the book's finalist status, and also let readers know about the voting. Because this is only the second year of The Quills, even many diligent readers aren't aware of the awards, and how they're chosen. They really are a chance for book lovers to make their voices heard.
Business book voting is here, book of the year voting is here, and all 19 categories are available from every voting page. Voting lasts until September 30 -- the results will be announced Oct. 10.
Posted by Lynne d Johnson at 7:31 PM
August 31, 2006
What's up with Wal-Mart?
There's been a lot happening with Wal-Mart lately. Last week, Advertising Age reported that in the company's attempt "to broaden its appeal and woo both upscale and urban markets" it has "hired a gay-marketing shop, joined the National Gay & Lesbian Chamber of Commerce and begun discussions with activist groups about extending domestic-partnership benefits to its employees."
Meanwhile, DiversityInc highlighted that "Wal-Mart's recent partnership with the National Gay and Lesbian Chamber of Commerce (NGLCC) clearly has alienated some anti-gay groups, which are trying to stir up opposition to the giant retailer."
And then, other reports this week focused on the retailer's addition of upscale goods to draw in a wider shopping audience interested in more than low prices, as well as it "making nice with urban politicians and anti-Wal-Mart activists through a new ad campaign that touts its improved health insurance policy and charitable giving programs."
Whatever it is that's going on, Wal-Mart is changing. Many of these new moves could alienate its core customer base. Yet amid a sluggish back-to-school sales period, the retailer reported that same-store sales for August rose 2.7 percent.
Related Resources:
Feature: How Many Lightbulbs Does it Take to Change the World? One. And You're Looking At It., by Charles Fishman
Resource Center: Ten Steps to Turn Around Wal-Mart , by Adam Hanft
Slideshow: 10 Steps to Turn Around Wal-Mart
Posted by Lynne d Johnson at 1:12 PM
June 30, 2006
Ten Million Bottles of Beer on the Wall
The New York Times reported today that Wal-Mart’s British business, Asda, avoided a work stoppage on what promises to be one of its busiest shopping weekends by bowing to the union. What prompted the world’s biggest retailer to cave to its workers? Anticipation that the England/Portugal World Cup soccer match was going to bring out gaggles of beer drinkers.
According to the article, Asda expects to sell 10 million bottles of beer Friday afternoon. The British Beer and Pub Association (www.beerandpub.com) says beer is Britain’s “most popular drink” with 28 million pints consumed every day. The British Retail Consortium estimates an extra £1.24 million spent (about $2.25 million) in food and drink each week that England plays in the tournament, most of it beer. Those are numbers that Asda (and Wal-Mart) couldn’t ignore.
Cheers!
Posted by Tonya Garcia at 2:00 PM
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March 10, 2006
The Wal-Mart Blog, Weekend Edition: What Would You Ask CEO Lee Scott?
Last fall, addressing a conference of American magazine editors in Puerto Rico, Scott finished his speech with a little story. He said Wal-Mart staff members who travel on business for the company -- literally thousands are on the road all week, Monday to Thursday -- are asked to take the pens from their hotel rooms and bring them back to the home office, to use as office supplies. Which means that each week, in Fairfield Inns and Hampton Inns and Hilton Garden Suites, Wal-Mart staffers pocket the ballpoint stick pins with the hotel logos on them, and carry them back to the home office in Bentonville.
The moment is revealing for two reasons -- one intended by Lee Scott, and one unintended. First, of course, that is one heck of a frugal company. They ask their employees to systematically collect the free pens from hotels and use them for work. Wal-Mart could easily be harvesting 200 dozen free pens a week -- 125,000 pens a year, or more. The company might be saving $10,000 or more on the cost of office pens. Now, $10,000 is real money, but clearly for Wal-Mart, it's as much about instilling a tight-fisted, no-waste mindset in employees as about free pens.
Posted by Charles Fishman at 10:46 AM
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March 8, 2006
The Wal-Mart Blog: Is Wal-Mart's Factory Inspections Program a Fraud?
One of the areas where Wal-Mart is proudest of its own performance is in the energetic program it runs to monitor the working conditions in overseas factories that make the stuff we all buy at Wal-Mart.
The last thing Wal-Mart wants is a sweat-shop scandal -- the news that the products in the stores may be cheap, but only because the people who make those products are treated miserably.
In 2004, Wal-Mart conducted 12,500 inspections of factories that supply it with products directly -- factories that make a whole variety of house-branded products for Wal-Mart. That's 34 inspections a day, seven days a week. Indeed, Wal-Mart inspected every single factory that makes products for the company at least once -- 5,300 factories in 60 countries around the world. Wal-Mart has a staff of more than 200 fulltime global inspectors.
Continue reading "The Wal-Mart Blog: Is Wal-Mart's Factory Inspections Program a Fraud?"
Posted by Charles Fishman at 1:28 PM
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March 7, 2006
The Wal-Mart Blog: Day Two
Twice since November, Wal-Mart has made significant announcements about how it buys seafood. Wal-Mart is changing how it buys shrimp, and how it buys the wild-caught fish that it sells in grocery stores across North America (Wal-Mart is the #1 retailer in both Mexico and Canada, as it is in the U.S.).
Two things are striking about the seafood buying news from Wal-Mart.
Posted by Charles Fishman at 11:05 AM
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March 6, 2006
The Wal-Mart Blog: Day One
Fast Company senior writer Charles Fishman, who has been with the magazine since Issue #1, is the author of a bestselling book about Wal-Mart, The Wal-Mart Effect, which grew out of a story he wrote for Fast Company called, "The Wal-Mart You Don’t Know." (A chapter of the book was excerpted in Fast Company’s January/February issue, "The Man Who Said No to Wal-Mart.")
The Wal-Mart Effect has caused quite a stir — Fishman has been interviewed on NPR and CNN, reviewed everywhere from Business Week and USA Today to the Denver Post, and the book spent three weeks on the bestseller lists of both the New York Times and the Wall Street Journal. The Economist said The Wal-Mart Effect is "the most satisfying" of the Wal-Mart books, and "has frequent unexpected insights." The Economist then used the book’s ideas to frame its own story on Wal-Mart — "Measuring the Wal-Mart effect."
We’ve asked Charles Fishman to guest-host the Fast Company blog this week, to do a series of postings on the ways Wal-Mart is talking about changing its business; to look at how seriously we should take those changes; to consider their possible wider impact, and Wal-Mart’s chances for success.
Continue reading "The Wal-Mart Blog: Day One"
Posted by Charles Fishman at 12:55 PM
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