Wal-Mart Finds It Easy Being Green
By George Anderson
The Muppet character, Kermit the Frog, may not have found it always easy being green but he was smart enough to see the value in it because as the song goes, “Green’s the color of Spring”. It can be “cool and friendly-like” and it “can be big like an ocean, or important like a mountain, or tall like a tree.”
Normally when one thinks of Wal-Mart, the green that comes to mind is the color of money, but with its new experimental environmentally-friendlier store, the world’s largest retailer is seeking to discover if the “cool and friendly-like” green can actually put more green – as in money – into the company’s coffers.
In July, Wal-Mart will open a store in McKinney, Tex. that will feature wind turbines to generate energy and other features to reduce energy consumption. It has another similar store planned to open in Aurora, Colo.
“Ultimately,” reports the Dallas Business Journal, “the green buildings may serve as a blueprint in the design of other Wal-Mart stores. The retailer has said it would like to partner with universities to study the stores and then share that information with the retail industry.”
Moderator’s Comment: What do you expect to come out of Wal-Mart’s green store test?
Some have suggested that Wal-Mart’s green store strategy is simply about softening the company’s public image. That may be a benefit of this endeavor but
Wal-Mart is about making and saving money. The retailer is not simply doing this for public relations. We’ll be interested to see just how much the company shares with other retailers
about what it has learned by operating the units in McKinney and Aurora.
Wal-Mart should also get credit for its recent moves to provide leadership (self-serving or not) on environmental issues such as its partnership with the
National Fish and Wildlife Foundation, donating $35 million to conserve an acre of land for every acre developed for the company’s use. –
George Anderson – Moderator
If Wal-Mart really wants to make a lasting statement about environmental consciousness, it should commit to outfitting the rooftop of every building in its system (stores and distribution centers) with solar electric panels over the next several years.
This program could be a model for the planet. Wal-Mart’s operations cover more rooftop acreage than any other non-government entity. It could eventually reduce its net electricity purchases to nearly zero and even profit by contributing to the power grid in sunnier regions. The contracts would spur development of more cost-effective solar-electric technology, which in turn would lower the cost for others.
I seem to remember that Wal-Mart had made in-roads into a “green concept” store a number of years ago in Lawrence, KS. I think it’s great…but until they really fix their merchandising and customer service, they will continue to have issues.
WM appears to be doing this based on the publicity they will get and their on-going attempt to improve their image. In the long run, however, moves like this will only further blur their ability to manage. No organization has ever been successful when they attempt to send so many different messages as they have been doing over the past couple of years. In my book, this is only another example of how WM is trying to be everything to everybody. In reality, what they’re showing is their confusion and their inability to know what their role is in the marketplace come 2010. Keep in mind, despite all of their sales / profit growth, their stock price has remained quite flat for several years. Clearly it says WM is willing to try just about anything to get Wall Street to reward them with a stock price they believe is undervalued.
I do not think the “green avenue” will score WM any extra market share points from a politically correct angle, however it will help WM reduce their costs thereby allowing them to reduce their prices. I recently built a house with some “green” construction and, as a result, my gas and electric bills are 1/2 to 2/3rds less than my neighbors. Payback for my investment is 2 years. What is WM’s payback?
Ho hum, how many times have we heard the cliches about taking baby steps and putting something back to try and gain credit for moves in the right direction that go some way to make up for moves in the wrong direction. Does Wal-Mart think that doing this will stop people noticing their environmentally unfriendly acts ranging from encouraging people to drive to their stores (shoppers and employees) in gas guzzling vehicles to using millions of air miles per year importing cheap products from the other side of the world?
Think again. I only hope that the people they are trying to impress with their new green policies actually look at just how much this is doing (or not) to compensate for their old non-green policies.
Wal-Mart is just being Wal-Mart. They probably would have moved toward this anyway. If they can milk a little bit of good PR, then good for them. Kind of like the way Starbucks made some claim about using recycled paper in their coffee cups. They probably didn’t even realize they were, and when they did, they decided to tell the public that suddenly they are a tree hugger. All decisions made by publicly held companies are done to have a positive effect on the bottom line to improve stock price. The notion that their motives are anything different is nonsense.
I happen to live quite close to one of the green test stores. There is no doubt that the store was being planned/conceived long before Wal-Mart’s recent public relations snafus. I believe that they are just trying to stay ahead of efficient and modern retail store developments (ala Whole Foods). Any “bounce” they get off of this one will be a well-timed, happy coincidence.
Gene Hoffman is exactly right. Wal-Mart is like a big university, constantly probing for what works. It’s successful because enough of its initiatives do in fact work. It sure is better than sitting around and complaining. I never saw that increase anybody’s market share.
We aren’t talking about rocket science here! Industrial psychology has been a major factor in retail for well over fifty years. Fast food restaurants are generally decorated in hot (red, yellow, orange) colors to encourage consumers to eat and leave. Cooler colors like some blues and greens tend to relax people and slow them down. Notice the colors the next time you go out. See what colors are being used to influence your behavior where you eat, work and shop. Virtually every chain operator of any size has “color psychology” woven into it’s business presentation. They want to control your behavior to best benefit their bottom line.
Certainly, it can’t be me caught without an opinion, however, I find myself agreeing with every single comment so far. Is that possible considering the dichotomy of issues facing and revolving around any discussion concerning Wal-Mart? I can see the validity of every comment. What I do see, however, is a retailer not standing still on almost any front. They seem to cover every angle and every direction. That is, as has been mentioned, better than complaining. It also is part of conquering the world. When you set about to achieve that goal, you don’t stand still. Like them or not, you have to admire their ability to be covering almost everything, if not everything.
Wal-Mart has captured the great bulk of price-oriented shoppers and is at that stage where they must create new avenues to their doors to win shoppers with special motivating interests. The “green” project should appeal to environmentally minded people. If so, Wal-Mart will increase its SOM and grow further from there. If not, I’m rather certain Wal-Mart will create new projects to expand their customer base. Wal-Mart is similar to a huge university that always experiments with new ideas and concepts to keep on top of its game.