Is this show PERFECT TIMING or what?
Revisiting the Wal-MArt Effect: Sustainability, Detergent and Retail
Wal-Mart’s effect on the retail industry and suppliers remains despite slowing growth in same store sales. However, Wal-Mart can change industry habits with both positive and negative consequences. There is little question of how Wal-Mart can shift entire industries.
While Wal-Mart’s supposed green policy, Sustainability 360, is a bit hollow without a comprehensive change in company development policies, the Wal-Mart effect has been present here as well. While much attention is drawn to the energy conservation elements Wal-Marts greening campaign, it is with detergents where the Wal-Mart effect is having the largest impact.
For example, the entire detergent industry is being forced to green under the auspices of Wal-Mart attempting to reduce the amount of toxics in its stores. There are two particular instances where the effect is especially visible. One is with regards to a particular product, and the other is with the industry as a whole.
The particular detergent that has seen an immediate impact of the Wal-Mart effect was Unilever’s Small and Mighty detergent, which is an ultra concentrated detergent which is designed to be more environmentally friendly. Wal-Mart chose the product as a VPI, or Value Producing Item, a product that was picked by a Wal-Mart executive Lee Scott to get special attention. The product became an extremely successful launch product for Unilever based on the fact that it was product was being heavily promoted by Wal-Mart. The product was largely pushed as a sustainable product in Bentonville.
In addition to marketing a concentrated detergent in their stores, Wal-Mart is forcing change with regards to the chemical content of detergents to reduce toxicity and improve energy efficiency. Wal-Mart has basically insisted that detergent manufacturers change their formulations to make them more environmentally friendly. The industry out of fear of losing their biggest customer is beginning to comply.
Even outside of Wal-Mart’s suppliers the Wal-Mart Effect takes hold to some extent. Corporate greening has become a popular mantra for retailers and other business. Nordstrom for example in integrating more recycled content paper in its catalogs. Bank of America also has started their own comprehensive sustainability push as well including building more energy efficient banks.
There is an issue though whether the push for larger corporate sustainability is part of the Wal-Mart effect on American Businesses, or even if they are the best example sustainable practices. However, there is an effect, because Wal-Mart is focusing on these issues and forcing their suppliers and other industries to change their practices.
Even if Wal-Mart is not the best example, or even a leader in this area, some of its ideas regarding environmental sustainability are changing entire industries. The company may be forcing corporate America as a whole to act more responsibly, even when they still have sustainability issues to address, especially with regards to development.
My posting contains many opinions. So please do your own research and validation.
