How Walmart has changed America

To mark Walmart’s 50th anniversary, Time magazine has a very interesting multi-part article titled ‘10 Ways Walmart Changed the World‘.  I’m not sure it’s changed the whole world (yet), but I’m sure it’s done as the article claims to the economies of the USA and most other First World nations.  I can remember supermarkets getting started in South Africa in the 1960’s and 1970’s, with chains such as Pick ‘n Pay clearly showing the influence of Walmart in their layout, merchandizing, etc.

The Time article goes into several aspects of retail operations that I found very interesting.  (My business background and experience was in the information technology industry, and the companies for whom I worked weren’t in the retail environment, so much of this was new to me.)  Among other points of interest were:

Selection:  ‘When you step in the front door of a Walmart the range of things that’s available within 50 steps of you, 100 steps of you is kind of mind boggling. Fifty years ago, when Sam Walton first started, even the richest person in the world couldn’t step into a room and have access to the range of products that we have now. You can buy potting soil and a Timex watch, and it doesn’t seem weird.’

Data-driven management:  ‘In 1985, Walton and his chief lieutenant, David Glass, began developing a program called Retail Link. The software, and the hardware that went along with it, took years to perfect, eventually costing $4 billion. This revolutionary system delivered sophisticated information on consumer behavior, drawn from the data imbedded in the barcodes that passed through checkout counters … At the heart Wal-Mart’s offer to share its software program was a Faustian bargain for suppliers: Use our Retail Link program, play by our new rules and we will be your gateway to sales beyond your wildest dreams. Or refuse, and be shut out of America’s dominant retail chain. In fact, by sharing Retail Link, Wal-Mart gained command over its suppliers and effectively penetrated their executive decision-making.’

The Culture Of Overconsumption:  ‘Walmart’s push for low prices inevitably led to cheaper goods, once all the inefficiencies were wrung out of the supply chain. As Fishman writes, “Things become so cheap that it’s never worth repairing them.” This led to a culture of disposability as well as overconsumption’.

The Power Of Access:  ‘What makes Walmart a truly unique company is the way it is able to connect producers with consumers around the world with unimaginable efficiency. It is a force for interconnectivity and globalization in a way that even many Silicon Valley firms aren’t, and a vessel for the rewards and punishments of globalization. As Fishman says, “If you want to make something in Topeka, Walmart can sell it as easily in Costa Rica or China as they can in Kansas. If you’re a single entrepreneur in Mumbai, you don’t need a sales staff at all if you can sell it to Walmart, because they can sell it anywhere.” It’s this interconnectivity that has powered Walmart headlong into a new millennium, where it appears set to continue to thrive despite its size and the tenacity of its critics.’

There are many more insights at the link.  I found them very interesting, and I daresay anyone with even an academic interest in retail sales or marketing will do likewise.


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