Photo: Walmart
Walmart promotes and takes heat for ‘Made in USA’ goods
The Fourth of July is near. This is the time of year for companies to wrap their brands in the American flag. While generally a winning strategy, some can find themselves entangled in controversy when critics question whether their pro-American rhetoric aligns with corporate actions. Take Walmart for example.
For the third straight year, Walmart has given entrepreneurs the opportunity in its “Made in the USA” Open Call to pitch products to the chain. Items selected by Walmart’s buyers to be sold on Walmart.com and, in some instances, in its stores and clubs will be made, assembled or grown in the U.S. The Open Call is part of Walmart’s annual U.S. Manufacturing Summit held at the company’s headquarters. The retailer made a pledge in 2013 to purchase an additional $250 billion in U.S. made products by 2023.
Last October, it was revealed that Walmart had been under Federal Trade Commission (FTC) investigation for identifying products on its website as “Made in the U.S.A.” when they were not. At the time, the FTC said the investigation had been concluded when Walmart agreed to remove logos incorrectly identifying products as being domestically produced. The retailer blamed the issue on coding errors.
Unfortunately for Walmart, an advertising watchdog group claims the retailer is continuing to misidentify goods made outside America as being manufactured here. The group, Truth in Advertising.org (TINA), has sent a letter to the FTC asking the commission to address errors on Walmart.com, which it claims should have been taken care of already, considering the company’s commitment to do so last year.
TINA claims to have discovered over 100 “misrepresentations” on the site, including instances in which Walmart has labeled an item as being made in the U.S. even though the manufacturer “indicates that it was made, either in whole or in part,” elsewhere. There are also instances when the site contradicts itself with copy that says an item is made in American while in other places saying it may contain imported components.
Discussion Questions
DISCUSSION QUESTIONS: What’s your assessment of Walmart’s public campaign around goods made in America, now that it is several years in? Is Walmart more or less vulnerable to criticism about wrapping itself in the American flag today than it was before its first U.S. Manufacturing Summit held four years ago?
Poll
BrainTrust
Lee Kent
Principal, Your Retail Authority, LLC
Adrian Weidmann
Managing Director, StoreStream Metrics, LLC
It’s a great to promote Made in America goods, provided that they actually are made in the U.S. Walmart ran into trouble when many of their goods were mislabeled. The company should take steps to reassure the public that the goods are authentic, then continue the campaign.
With all of their mislabeling press, it is unlikely that Walmart has regained public trust. I would strongly suggest another avenue.
But that is just my 2 cents.
This should be easy to take care of — I can’t imagine why, having been caught out, that Walmart can’t remedy the problem.
Some groups are just dead-set on going after Walmart simply because they are a big company and feel a need to follow their money. We are in a global economy and we need to change the definition of “Made in America” to made by an American company. Obviously “Made in USA” does not mean the product is special or of a better quality. It’s just a buzz phrase we often take too seriously.
Consumers are sensitive about this issue … they’d prefer that more items be made here, they’ll react badly to mislabeling and they’re upset that U.S. companies can skip out on taxes by moving their “headquarters” to a P.O. box in Dublin. Retailers that misrepresent the overseas origin of products will face the wrath of the customer.
I like that Walmart is giving entrepreneurs a chance and I would like to see the chain offer more opportunities like this. It would also be great if all these products were being made in the U.S. and that manufacturing jobs were increasing as a result. Overall, Walmart needs to do a better job labeling their products and since this seems to be an ongoing issue for them, they need to put steps in place to make sure these inconsistencies don’t keep happening on their clothing labels and website.
The number one mantra for marketing programs like these should be “do no harm.” Any goodwill generated by a “Made in America” campaign can be overwhelmed by negative accusations of mislabeling and dishonesty around the claims.
It’s easy enough to be conservative and certain about “Made in America”-type marketing claims. Brands and retailers should be cautious in their marketing to avoid the blowback that Walmart is now facing for overstating its claims.
What does “Made in America” mean? Should be simple, right? But not so much. For example, I anticipated a ration of guff when I first rolled into a south Georgia hunting camp in my new Nissan Titan pickup. (Believe me, this is a tougher crowd than TINA.) So I got my facts together in advance. Sure enough, the yard was full of Fords and Chevys and it didn’t take long for the “Japanese junk” comments to fly.
I escorted the men to the yard and proceeded to open the doors of each truck in turn, reading from the “sourcing” stickers. Ford — made primarily in Mexico. Chevy — made primarily in Canada. Nissan — made primarily in Birmingham, Alabama. What?! “Consternation” can’t begin to describe what ensued.
So, do we want “American made” to mean “made by an American-owned company” as David Livingston suggests? Or do we want it to mean “made on American soil” regardless of who owns the company? Or do we want it to mean something completely different? Regardless of how we decide that question, I do agree with David that this is primarily a socio-political football and someone will always want to kick it for their own purposes. There’s no winning for Walmart on this one because it fits too many political paradigms to deem them charlatans, purveyors of Chinese junk and American job killers.
This kind of press is not only bad for Walmart, it is bad for the entire business community. This is the type of stupid error or lack of accountability and responsibility that is eroding the confidence of the American consumer in both the public and private sector. If companies or governments claim to be doing something as simple as labeling where something is being made or what it is made of and then lies to the consumer, the consumer at some point will lose all faith in the organization.
Do not forget that Sam Walton built his business on pledging to be American-made. Walmart put a lot of mom-and-pop home-grown American stores out of business when they put their stores in small towns and priced their merchandise even more aggressively until the competition was gone. Walmart, more than anyone else, cannot afford to misrepresent Made in America in their stores. They are and deserve to be under more scrutiny.
Good for TINA to keep an eye on this and to pressure companies to advertise truthfully. (Could they please turn their attention to the presidential campaign ads?) But Walmart should not be singled out here. Plenty of suppliers sneak around the concept, much to the chagrin of legitimate claims by companies who really do still manufacture in the US.
The first question that should be answered is what does “Made in America” mean? A universally accepted definition would go a long way in clearing up any confusion if it means every part is made here and the final product is assembled here, some part from any country can be used as long as it is assembled here, etc. This is an issue for all companies not just Walmart.
I think most people by now have a pretty good idea what Walmart is about, and they shop there, perhaps not “anyway” as much as by necessity … or at least it best suits their needs. Feel-good campaigns aren’t going to change that much, one way or the other.
With the risks of brand damage visibly apparent to Walmart executives, it would seem a problem that could be easily resolved.
I’m a believer that most problems of this nature can be resolved if there is willingness among executives to make it happen, and if the resources are committed to execute an agreed upon plan.
Why would Walmart allow this gap to continue to exist? Maybe only their executive knows. I would like to see RetailWire interview Walmart executives and get their take on the answer.
If a retailer can’t figure out where products are made, does it have any idea what’s IN them?
Does the public really care? Walmart promotes “Made in America” manufacturing. So they made errors and attempted to correct them. End of the day, let the consumer be aware and if they truly wanted to only buy “Made in America” they need to do their own due diligence to ensure 100% domestic product.