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One other aspect of the Wal-Mart culture which has attracted some attention is simply a matter of lifestyle, but it is one that has bothered me ever since we began to be really successful. The fact is, a lot of folks in our company have made an awful lot of money. We’ve had lots and lots of millionaires in our ranks. And it just drives me crazy when they flaunt it. Maybe it’s none of my business, but I’ve done everything I can to discourage our folks from getting too extravagant with their homes and their automobiles and their lifestyles.
It goes back to what I said about learning to value a dollar as a kid. I don’t think that big mansions and flashy cars are what the Wal-Mart culture is supposed to be about. It’s great to have the money to fall back on, and I’m glad some of these folks have been able to take off and go fishing at a fairly early age. That’s fine with me. But if you get too caught up in that good life, it’s probably time to move on, simply because you lose touch with what your mind is supposed to be concentrating on: serving the customer.
All the kids who had grown up on farms and in small towns had come home from World War II or Korea and moved to the cities where all the jobs were. Except they weren’t really moving to the cities; they were moving to the suburbs and commuting into the cities to work. It seemed like every family had at least one car— and many had two— and the country had started building its interstate highway system, all of which changed a lot of the traditional ways Americans were accustomed to doing business.
“Shortly after we opened a Wal-Mart in Wheat Ridge, Colorado, I had a lady come up to me and say, ‘Oh, I just want to thank you so much for coming here. This is the best thing that could have ever happened.’ I thanked her and asked her what she did there in town, and she said, ‘Well, I run a paint store right over here, just down in this mall.’ ‘She went on to say that the day our store opened turned out to be the biggest day she had ever had since her paint store opened. ‘You’re pulling all these people into our shopping center. And the neatest thing happened to me Saturday. A man came in looking for a particular kind of paint and said he knew we had it. He said he knew because he’d been in the Wal-Mart looking for it, and the paint department manager told him we had it and sent him on over. I thought that was wonderful.’ ’
‘And that’s what we did, and what Wal-Mart still does. We would tell the vendors, ‘Don’t leave in any room for a kickback because we don’t do that here. And we don’t want your advertising program or your delivery program. Our truck will pick it up at your warehouse. Now what is your best price?’ And if they told me it’s a dollar, I would say, Tine, I’ll consider it, but I’m going to go to your competitor, and if he says 90 cents, he’s going to get the business. So make sure a dollar is your best price.’ If that’s being hard-nosed, then we ought to be as hard-nosed as we can be. You have to be fair and upfront and honest, but you have to drive your bargain because you’re dealing for millions and millions of customers who expect the best price they can get. If you buy that thing for $ 1.25, you’ve just bought somebody else’s inefficiency.’
DAVID GLASS: ‘I was in a store recently where a manager and an assistant manager were taking a department manager through her department. They were saying, If you were a customer, how would you buy that item?’ She was cramped for space and had put this item out of reach of the average customer. And they kept going. ‘If you were a customer, what related items would you want to buy with this? And how would you find them?’
‘I loved it. So many times we overcomplicate this business. You can take computer reports, velocity reports, any kind of reports you want to and go lay out your counters by computer. But if you simply think like a customer, you will do a better job of merchandise presentation and selection than any other way. It’s not always easy. To think like a customer, you have to think about details. Whoever said ‘retail is detail’ is absolutely 100 percent right. On the other hand it’s simple. If the customers are the bosses, all you have to do is please them.’
LEE SCOTT: ‘Our drivers really are extremely loyal to their mission, which is to serve the stores. They report back to Wal-Mart continually on things like merchandise thrown out behind the store that looked like it was good, attitude and morale problems in the stores. For a long, long time, Sam would show up regularly in the drivers’ break room at 4 A.M. with a bunch of doughnuts and just sit there for a couple of hours talking to them. ‘He grilled them. ‘What are you seeing at the stores?’ ‘Have you been to that store lately?’ ‘How do the people act there?’ ‘Is it getting better?’ It makes sense. The drivers see more stores every week than anybody else in this company. And I think what Sam likes about them is that they’re not like a lot of managers. They don’t care who you are. They’ll tell you what they really think.’
DAVID GLASS: ‘We believe that we have to talk about and examine this company in minute detail. I don’t know any other large retail company— Kmart, Sears, Penney’s— that discusses their sales at the end of the week in any smaller breakdown than by region. We talk about individual stores. Which means that if we’re talking about the store in Dothan, Alabama, or Harrisburg, Illinois, everybody here is expected to know something about that store— how to measure its performance, whether a 20 percent increase is good or bad, what the payroll is running, who the competitors are, and how we’re doing. We keep the company’s orientation small by zeroing in on the smallest operating unit we have. No other company does that.’
Our district managers are doing the job that I did back in 1960— the real hands-on, get-down-in-the-store stuff. But also, we have eighteen regional managers, all of them based here in Bentonville. Every Monday morning, they pile into those airplanes and head across the country to the stores in their regions. It’s a condition of their employment. They stay out three to four days, usually coming back in on Thursday. We’ve drummed into their heads the belief that they should come back with at least one idea that will pay for the trip.
In retailing, there has always been a traditional, head-to-head confrontation between operations and merchandising. You know, the operations guys say, ‘Why in the world would anybody buy this? It’s a dog, and we’ll never sell it.’ Then the merchandising folks say, ‘There’s nothing wrong with that item. If you guys were smart enough to display it well and promote it properly, it would blow out the doors.’ That’s the way it is everywhere, including Wal-Mart. So we sit all these folks down together every Friday at the same table and just have at it.
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