Posted by
OB Busch on Tuesday, February 10, 2009 3:13:52 PM
I
have a lefty friend that is totally against Wal-Mart. He will not allow anything
from Wal-Mart in his house. He recites the same old pabulum about low
wages, no health care, even sub human working conditions. Low wages
and expensive health care has always been the norm in retail. Do lefties
think its better at Sears or Target or the local hardware store? When they
brag about the deal they got on the latest gadget, who do they think ‘pays’ for
that ‘deal’? As it was for me, store level retail is a stopping point on the way
up. For others it’s a starter job or a stop gap job. Those that settle in at that
level are the same ones who would settle in anywhere.
The amusing part about the people that disparage Wal-Mart is that most of
the people that they voice their disdain to are regular customers.
(One of these days I’m going to show up at my lefty friend’s house with one
of those huge pumpkin pies they sell at Wal-Mart and tell him it’s from a
new bakery called Wally’s on the Square)
An article by Charles Platt in the New York Post puts to rest many of the
complaints against Wal-Mart. His column details his recent experience
as a Wal-Mart employee.
One of the things that caught my eye was the autonomy that store
managers and department heads have in controlling inventory levels.
The reason this caught my eye is that I started my career as a Store
Manager for a clothing chain in southern California.
One of the trends at the time was the plan-o-gram. The bigger store
chains decided that if they could control and market the inventory from a
central location they could save money by both reducing the number and
pay of store level management. The way this worked was a store got a
truck load of merchandise and a Plan-o-gram. It told the store exactly where
to locate the product and how to market it. Every store was uniform.
While this idea sounds good on paper, let’s look at a real life situation.
I worked for a small family owned chain of free standing clothing stores.
The store I managed was located in San Bernardino. On the other extreme
was a store in Orange County (CA). Now these are two entirely different
worlds and buying patterns differ greatly. While the manager at Orange
County ordered lots of Jordache and Gloria Vanderbilt designer Jeans
(All the rage at the time), I ordered Levi’s.
The owner of the chain called plan-o-gram managers ‘glorified key carriers’.
Wal-Mart started out as a Plan-o-gram operation.
At the beginning Wal-Mart built stores in mainly small town/rural areas that
had a big shopping draw and most importantly no KMart or any other
discounter. From the beginning price was the drawing card. Building on
the success of this venture Wal-Mart moved up to medium size cities,
filling voids that KMart and the others missed or neglected.
Wal-Mart has now surpassed all of its competition. They did it by adjusting
to the realities of the marketplace. They rolled back their ‘Made in USA’
campaign when that became a financial burden and they adjusted their
Plan-o-gram thinking. It is not easy to steer a behemoth in any business
as bureaucracies get entrenched. Just ask KMart.
Retail success depends on flexibility; apparently Wal-Mart knows that well.