Even Wal-Mart watches economic climate closely
Staff -- Home Textiles Today, 5/27/2002 12:00:00 AM
ORLANDO, FL —
Even Wal-Mart is not immune to a tough economy, according to Tom Coughlin, president and ceo, Wal-Mart Stores division, who said that even the small changes that affect its primary consumer — the opening-price point customer — in turn affect the retailer.
When gas prices climb even 10 cents, "we see automatic reactions," Coughlin said at the closing keynote session here, "Achieving Retail Results Today and Tomorrow," during the International Mass Retail Association's convention here last week. "During tough times, we go back to the basics." The opening-price-point customer "is so critical to our success — and failures, when we don't keep it in mind."
The discounter also asks itself how it performs in such areas as store-level presentation, looking at what the competition is doing right, as well as training people, he said. "We came a long way, but it's a continuing journey."
Besides low prices, Wal-Mart also caters to its customer by stocking its stores based on community needs. Coughlin noted that there are five stores miles apart in northern Arkansas that sit in locations that are each uniquely different in income levels, ethnicity and job environments — from farm communities to university communities. "It's amazing how different they are. The assortment has to be right for the community."
This also includes investing in new stores, distribution centers, technology and logistics and renovating existing stores into supercenters, he said. "We continue to build a trust level with customers."
One of Wal-Mart's biggest challenges, he added, was to develop leadership as the company expands. It's been "very fortunate" with its current leadership, but as it becomes larger it "has to have more people in the pipeline. We expect a lot from people."
In addition, though, there is more turnover in urban stores than rural ones, Coughlin said. Wal-Mart doesn't look at markets as "how different they are but what the similarities are." It strives to make people feel important to the organization, he added, whether they work in a new store or not.
Which retailer dominates has shifted over the years, said Best Buy's Brad Anderson, ceo, who was also on the panel. "You have to be fast, fluid and capable of change, and stay connected with the customer." Though Best Buy has been through several crises over the past 20 years, Anderson believes it has succeeded and thrived because it had learned from its mistakes. In addition, the company understands the importance of its workforce. It has a "vested interest in the employee base, not the leadership base. The leadership can get comfortable — they get rich, and they don't want to change."
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