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January 24, 2007

In Wal-Mart's Defense

It seems strange to feel sorry for celebrities, professional athletes, or organizations whose cash flow is measured in billions of dollars. Sure, celebrities and athletes have to deal with rude paparazzi and a general lack of privacy when they mix it up with regular folk and, in many cases, in their own homes, but they also have access to areas and money you and I can only dream of. Plus distributors of all sorts practically throw their products at the celebrities in hopes they will wear or feature the free item in public, thus creating a greater demand for it. Additionally, their financial success affords them access to media that normal people seldom have, and that access is often provided with no cost to them.

The success and wealth they enjoy ought to be celebrated, for that same success remains available to everyone in this country, though the chances of realizing that success are understandably (and necessarily, as it turns out) slim. It is a good model of achievement that is steeped in liberty on all sides. Not only are all groups free to pursue their moral and financial interests, they also freely assume the risks associated with those pursuits. I read recently, for instance, that more than half of all members of the Screen Actors Guild are required to work other jobs as they seek the fame and fortune associated with success in that industry. (We can presume with some accuracy that should they achieve their goals, they will whine and complain about the supposed burden of their celebrity, but that's another matter).

I say all that to acknowledge that, while I've been pretty hard on Wal-Mart for several of its blunders related to its employees, it's also important to step back and take a wide angle view of the entire company as well as the economic reality of the situation before forming too hasty a judgment.

In 2005, some members of my wife's family experienced some hardships after being hit by Hurricane Rita near the Gulf Coast in Woodville, Texas. Power was out. Drinking water was cut off, and gasoline prices went through the roof -- especially in the immediate surrounding areas.

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The government, still smarting from the criticism over its response to Hurricane Katrina, made it shortly before I arrived later in the same week. They were distributing bottled water, ice, and what was essentially junk food. It was enough to get by, but without more substantial supplies, not comfortably, and not for long. For my part, I brought water, about 55 gallons of gasoline, and a small generator.

I arrived in the dead of night, and in spite of the darkness, I could tell that the damage done to the area was extensive. The family was awake when I got there, and after they showed me where the FEMA ice and water was, they expressed their excitement at being able to purchase some food and supplies (including prescription medication) from Wal-Mart, which announced it would have a generator and be open for business the next day.

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The next morning, I awoke to discover just how accurate my impression of the damage was. Trees had fallen on houses, roads, and power lines. Anyone without a generator had no power, and even in late September, the heat of Texas exacerbated the intensity of that little inconvenience.

My wife's uncle, Howard, drove me around town the next day. It was the first time I'd ever seen firsthand that level of devastation. On the bright side, neighbors were helping each other out any way they could, but whatever feelings of inspiration such cooperation engendered was tempered by the sheer enormity of the destruction (which still, even more humbling, didn't compare to that of New Orleans earlier that year).   

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Needing supplies to temporarily cover the roof of a house (damaged by a fallen tree) as well as some medication and nonperishable food, we stopped by Wal-Mart, which was, at the time, the ONLY nearby place available to obtain supplies of the sort we needed. Additionally, it was one of the few open local businesses able to employ the workforce that was effectively given an unpaid leave of absence, courtesy of the hurricane.

I have no illusions about Wal-Mart's magnanimity. Whatever its corporate goals of charity are, the reason Wal-Mart was open was because of the same reason it currently resists calls for the unionization of its employees. Wal-Mart always acts in its best interests.

But that's the genius of capitalism. It works best when companies provide others what they need and want, and Wal-Mart seeks to do that. From affordable clothing and prescription medicine to innovative distribution processes to convenient locations and hours, Wal-Mart serves a great deal of the market in a way consumers generally appreciate, which is evidenced by the company's cash flow.

Even its recent staffing decision that calls for what can be described as company-mandated flex time, which has also come under fire from the labor groups that have been harassing Wal-Mart, is aimed at cutting costs and supplying the convenience of sufficient staffing to customers at the times they are most likely to shop.

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Where I think Wal-Mart may find itself in trouble is when the corporate bean counters resolve to either violate the long accepted Kantian principle that would have people (their employees) treated as ends, and not means, or give the impression that they would do so without challenging the charge.

Many people smarter than I (Such as Gavin and Lewis) have reflected on the failure of Wal-Mart to foster brand advocacy in its employees. I have agreed with them on this account. But let us not mistake this deficiency to be an example of market failure. No one forces anyone to work at Wal-Mart or anywhere else for that matter (in 2007 America, at least). If employees are unhappy about working at Wal-Mart, they are free to pursue prospects that offer more agreeable terms.

In fact, in a free market economy, an exodus could be seen as a positive thing, as the labor void that results at Wal-Mart will either cause the company to offer better terms of employment or witness a deterioration in quality and service that would cause the giant to lose market share to competitors like Target and, perhaps (and perhaps not) Kohl's.

There's nothing wrong with picking on Wal-Mart and its marketing woes, and I don't feel sorry for the company in the least. However, as effective as blogs are at serving as sounding boards for our personal rants, it's good and proper to serve as witness to positive examples of marketing that results in a fulfilled need, especially when those responsible did so without being forced, and when no one else was fulfilling it.

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- Cam Beck

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Comments

I actually like Wal-mart despite their stupid marketing practices. I think they've gotten away a bit from Sam's vision, especially when it relates to employees and community relations.

I grew up in a small coastal town ... and we were all really concerned when K-mart opened. We were worried that it would decimate the local shops and change the character of our sleepy village. And you know what, it did.

But people and businesses bounced back, things changed and got bigger and better. It made the small shops work harder and provide better customer service, it gave us kids some place to work on the weekends and it brought big-city products to us at a good price.

The interesting thing is, that the PEOPLE who really make these big stores work are locals. They care not just about their job, but about their community. They make the big company look good, but are often easily overlooked ... I always think that you get out what you put in. It is a shame that some companies don't take the same approach.

Oh but I should say ... I also agree we should promote GOOD examples on our blogs. Unfortunately there are fewer examples than I would like to see!

Actually, I'm keeping my fingers crossed that I can give up this crappy advertising career as soon as that Walmart job opens up! Here's hopin!

Gavin - I agree. In many ways, corporations are a lot like politicians. They claim credit for achievements that were actually encountered because of the people.

Paul - Wal-Mart may not know it (yet), but they would do well to heed the admonitions on your blog. Besides, the CMO position probably pays pretty well at Wal-Mart. ;)

Cam,

Good post. I don't believe WalMart is evil or even a bad company. But I regularly criticize them because their marketing lacks perspective, sensitivity and any acceptance of responsibility for the criticisms it receives. Nobody can be right 100 percent of the time, but WalMart's messaging comes across as if they are never wrong.

Hey Lewis,
Have you seen how Wal-Mart recently turned itself in to the Labor department for underpaying overtime... It settled for something like $33 million.

It also OVERPAID some overtime for upwards of 200,000 workers at $20 each, a sum it did not seek to recover.

What's clear is that the to the folks at WakeUpWalmart and other critics, this concession will be evidence of Wal-Mart's heavy-handed disrespect and conspiratorial connections instead of a genuine attempt to make right what it unintentionally did wrong.

In fact, I just checked. It's already started.

When I first entered the workforce, I was given the status of a "part-time" worker and assigned 37.5 hours per week (the maximum I could be scheduled without requiring the employer to treat me like a full-time employee). Even though I seldom worked less than 41 hours per week, I maintained that status for about six months. I was paid overtime for anything over 40 hours that I worked.

This was a "sweetheart deal" for my employer, but it was also a "sweetheart deal" for me, as it allowed me to get my foot in the door of an industry I wanted to get into.

Of course, my employer's behavior fostered no loyalty in me to stay once the skills and experience I obtained allowed me to outgrow the position, but it worked out better for me, anyway. That's just business, and I still reflect fondly on my time there.

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