December's cover story, "The Wal-Mart You Don't Know," attracted among the largest, most passionate reactions of any story Fast Company has published. The magazine has been flooded with more than 300 emails and letters from readers eager to comment on the article. More surprising than the volume has been the depth of the emotional reaction the story inspired.
The Wal-Mart Effect
This article should be put into every pay envelope distributed in the United States. Too many times, we as Americans buy so indiscriminately and with no thought to the future. The final responsibility lies with the consumer, and we need to take our responsibility more seriously. This isn't just an article about Wal-Mart, this is an article about us, American consumers and workers.
Your article on Wal-Mart is not really about Wal-Mart—it's a general warning that the power of competition may actually turn against us. Since consumers are concerned about the price they pay for goods, it seems logical that cheaper products stand a better chance of getting sold.
However, since we live in an unbalanced world, and one with few frontiers, competition becomes increasingly global, and we therefore face a dilemma: Should we buy cheaper or should we protect our own workers?
The problem specific to Wal-Mart is its size; on its own, Wal-Mart can alter a whole market or industry by opening new channels to cheaper suppliers. Normally, it would at least take some time to flood a whole market with extremely competitive offerings. Wal-Mart's reach makes it possible to change a market's face overnight.
And that is the scary part.
Executive project officer
Selling consumer goods to Wal-Mart is as demeaning an experience as anyone can imagine. On my very first visit to Bentonville, I was indoctrinated. I had never worked with a retailer who opened a meeting with "I don't care about why your product is better than someone else's. This is the price I am willing to pay. If your price is more than 'X,' this meeting is over."
We were selling a product that is enthusiast driven, with a wide variety of features. The new Wal-Mart buyer, fresh from purchasing disposable diapers, simply considered the product a commodity. So, as all vendors who sell to Wal-Mart eventually do, we capitulated.
The customers? They lost features, selection, design, and individuality. The net result was that Wal-Mart saw a rapid sales spiral downward. Suddenly, our product became a bad category, so Wal-Mart eliminated it for all but a token presence. From 30 feet of shelf space to about 5 or 10.
The three primary manufacturers saw their overall sales drop by 30% to 40%. They further found the need to nearly eliminate their U.S. manufacturing in favor of Asia-sourced product.
Wal-Mart will do very well by selling what it desires: cheap products. As the buyer said to me, "Someone is always willing to give me a better price. If you won't, I will find someone who will." The sad situation is that no one can continue to manufacture products cheaper and cheaper. There is a bottom.
Name withheld on request
It is consumers who ultimately have the power, but we've been brainwashed into thinking it is big business that has it.
The O'Jays said it a long time ago in a song called "For the Love of Money": "For a small piece of paper, it carries a lot of weight." When consumers start throwing their weight around, they will be heard. Wal-Mart is not the only bully in town.
It is amazing to me that you choose to malign everything that is good about America. Wal-Mart stands for the American dream. It represents why our standard of living is the highest in the world and why the consumer reigns supreme only in America—and you hate them for it?
Shame on you for your hatred of success, your envy, and your contempt of high standards!
Redwood City, California
It's all well and good for those who can shop elsewhere to do so. But if I have $40 to spend and need 30 different things, by shopping at Wal-Mart, I can get more of what I need and have fewer items to "put off until we can afford it." By shopping elsewhere, I would just lower my own standard of living.
Let the other guy buy the $9 lock. And besides, I like Sam's Club soft drinks better than I like Coke or Pepsi.
Lake of the Woods, California
In our December Cheat Sheet ("Celluloid Leadership") we were too literal in our pursuit of accuracy. While James Stewart did take Capital City to the big screen in his 1939 feature film, the correct title of the movie was Mr. Smith Goes to Washington, not Mr. Smith Goes to Hollywood.
In October ("And 119, That Would Be Airportium") we incorrectly listed 18 as the atomic weight of Argon; 18 is the atomic number.
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A version of this article appeared in the February 2004 issue of Fast Company magazine.