SAN ANTONIO — Wal-Mart Stores' plans for U.S. and international growth are closely tied to vast changes in consumer behavior, Lee Scott, former chief executive officer, said in a presentation here.
The retailer's strategies, ranging from urban store growth to expansion in emerging markets, are built around major shifts in customer profiles, he explained.
“The stage has been set for the most volatile and complex times in world history,” said Scott, a 30-plus-year veteran of Wal-Mart who served as CEO from 2000 to 2009. “Technology and social networks are driving equality — creating a customer that will know more about your store than you do.”
Scott's remarks came during a session here at the American Bakers Association Convention, where he was interviewed in front of a supplier audience by David Orgel, SN editor-in-chief.
Scott said Wal-Mart's strategy for success in this new milieu hinges on looking to where customers will be instead of where they have been. This equates to being fast to act, nimble and willing to widen perspective and commit to change in order to evolve with consumers.
Wal-Mart's new, urban model is evidence of tying into consumer demand. Uncharacteristically small store footprints of 20,000 square feet are planned to mine retail spaces in areas such as downtown Chicago and Philadelphia. New York City has been a moving target, evading Wal-Mart's sights due to union opposition, but Scott disagreed with those who believe it is necessary for Wal-Mart to penetrate the nation's largest city. “There are a lot of places for Wal-Mart to grow,” he said.
Scott's vision for Wal-Mart also involves the global growth of a middle class in emerging economies such as Brazil, China, Russia and India, among others, which are experiencing fast growth in consumer spending, he said.
Scott helped lead Wal-Mart to make gains in a number of progressive initiatives, including sustainability. The green initiative has been no easy task, but it's indicative of how Scott approaches problems. “Sometimes you can over-think things to the point where it paralyses you,” he says, noting senior management was concerned about pursuing goals that might be “unattainable.”
Instead, Scott set aspirational, ideal-world goals that were unlikely to be hit, but they got the company out of gridlock over the sustainability question. “We set crazy goals and sought to improve every day. That's what gave us the power,” he said.
Over time Wal-Mart increased engagement with local communities, and better polished social and environmental policies, moves that seemed to decrease the level of negative public perceptions.
According to Scott, a company doesn't have to choose between doing good for itself and doing good for the community, country or world. “It's at that intersection that we see the most challenges, but also, the most opportunity,” he said.