WAL-MART AND ITS COMMUNICATIONS STRATEGY

From the beginning, the Wal-Mart retail firm and its founder, Sam Walton, have been enormously successful. Sam Walton opened his first Wal-Mart discount store in 1962, the company became a public company in 1970. SAMs Clubs were rolled out in the 1980s and became super-centers in the 1990s. Today, Wal-Mart is the largest retailer in the world and easily topped the latest Fortune 500 list of the world largest corporations in 2003. Wal-Marts success and its exemplary growth first and foremost within the US market has been attributed to the large size of the US market, founder Sam Waltons inspirational leadership, an associate-focused organizational culture, a capacity for reinvention and innovation, low cost operations, vendor partnering, an efficient logistics system, extensive internal communications, continuous merchandising, a customer service orientation and competitor inattention. But, one important and previously overlooked cause for WalMarts phenomenal growth seems to be its communications strategy, which is linked to its corporate mission and identity of serving customers and the communities in which the company operates, and also enables it to reach its market objectives and to cancel out opposition to its aggressive low cost strategy. Wal-Mart is exemplary of the low-cost competitive strategy and it has fine-tuned the low margin, high inventory turnover, and volume selling practice that comes with it. Volume buying enables lower costs of goods, and the key, according to Sam Walton, is to identify the items that can explode into big volume profits if you are smart enough to identify them and take the trouble to promote them. Wal-Mart demands vendors forgo all other amenities and quote the lowest price. And its retail strategy for capturing market share involves and aggressive carpet bombing campaign in which an area is chosen and competitors are challenged and eventually driven out by its low cost strategy. Of course, with such an aggressive low cost market strategy, one would expect the WalMart corporation to run into fierce opposition from citizens, communities, the industry and the US Government. But the retail giant has not, because of its sophisticated communications strategy that connects the retailer symbolically to the dominant ideologies of American life through the imagery of frugality, family, religion, neighbourhood, community and patriotism. Wal-Mart locates itself centrally on Main Street of a nostalgic hometown. This symbolism and imagery, carried through in all its advertising, in-store promotions and staff communications, not only positively disposes shoppers but it also decouples WalMart from unfavourable outcomes of its low cost strategy and its market success. These consequences include local retailers being forced out of business, small town opposition, accusations of predatory pricing and allegations about products being sourced from overseas sweatshop suppliers. It is noticeable in this regard that Wal-Mart, a hard-hitting low cost firm, has received fairly little public opposition and shuns the

limelight in recent anti-globalization demonstrations (that have instead targeted such companies as Starbucks and Shell). In otherwords, Wal-Mart is able to couch its low cost market strategy in terms that not only fit with its own customer-focused corporate identity, but also are acceptable to consumers and the general US public with language such as Our aim is to lower the worlds cost of living. Our pledge to save you more. Our commitment .. to satisfy all your shopping needs and that appease opposition to it. This is done, as mentioned, by referring to retail symbolism of saving, family, America and patriotism, and community and hometown. Advertising flyers, for instance, present plain folks (as opposed to professional models), apparently ordinary people including Wal-Mart associates, spouses, children, parents, pets, suppliers and customers, and devote an inordinate amount of space to community-oriented and patriotic topics, delving in places into philosophical monologues about American enterprises, friendly customer service and other topics. The general public that is exposed to such flyers is , because of its nostalgia and patriotism, likely to be favourably predisposed to them. Stephen Arnold, a professor at Queens School of Business (Canada) and his colleagues observed that the symbolic presentation of Wal-Mart might be different from the objective reality. That is, Wal-Mart projects an innocent, homespun image of a happy community involving vendor partners, associates and customers. The extremely rich weave of cultural-moral symbols upon which this interpretation is based, however, may have as much to do with Wal-Marts communications strategy and its quest for legitimacy as it does with a true and profound community spirit. For example, in lieu of the vendor-partner persona, aspiring Wal-Mart suppliers wait long periods before meeting a buyer and are then squeezed aggressively for the lowest prices. Any many goods, apparel in particular, do not display a Made in the USA label and Buy American signs are found situated embarrassingly on racks of imported products. Furthermore, some have alleged that the goods are sourced at overseas sweatshops and that the low prices are a consequence of child labour. Newsgroups and websites have sprung up for disgruntled former Wal-Mart associates to vent their unhappiness (e.g. http://www.almartworkerslv.com, http://www.walmartsuck.com). Wal-Mart is regarded by some as a wolf in sheeps clothing, and its communications strategy, which is closely linked to its corporate mission and has also successfully supported it s low cost market strategy, may in such a view have been the instrument for constructing and legitimizing the sheeps costume. Questions for reflections 1.What communication strategy has Wal-Mart followed? Would an alternate strategy have been more successful? 2.Why has Wal-Mart been so successful on this account, while other large firms with aggressive low cost market strategies have been subject to public scrutiny and outrage?