Wal-Mart: 'On the Side of the Angels'

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It doesn't mean that you resolve all the environmental issues. What it does mean is that the things you're buying every day can be better for the environment. I've not had a supplier yet that's said, we're not going to do this; we think it's wrong. People are pushing us too hard. The truth is if the customer wants Tide and Tide comes in a 50-gallon barrel, that's what we're going to sell. But between us and P&G we can figure out how to make that a smaller package with the same effectiveness, same number of uses. We can promote it and help convince the customer that it has the same value that the bigger bottle did, then together we can have an impact.

Is there a day when someone chooses just not to participate in packaging, three or four years down the road?

Oh, I think you'll start by favoring the people who are doing the right them by giving them the aisle space, the end caps, letting them be in the monthly tabs we run. I think you do it on the front end with a carrot. But ultimately if something is just wrong, people will have to correct it.

Have you studied whether your customers will pay a premium for green and how much?

We haven't studied it. But we put product out that is green and has a premium and it just doesn't do well in our stores. I think there are probably stores, Whole Foods (WFMI) for example, where the greener it is the more people are willing to pay.

Did you say, though, that people were buying the more expensive lightbulbs instead of the traditional ones?

But, they save money.

But it's a short-term vs. long-term issue?

What we're seeing is like the lady in Nebraska or South Dakota who has a motel. She changed the lightbulbs one a week until she got all of her lightbulbs changed. So if you have 300 million people, you start making those decisions. Our goal this is year is to sell 100 million of them.

Are you backing off your pursuit of the selective, more affluent shopper?

Well, it didn't seem to work real well.

Yeah, why didn't that work?

Because we are defined by our customer, not by us. And we can't wake up one morning and say we're going to be something different and something more to you and not earn it. We just can't. We're going to have a different marketing campaign, we're going to try to put some different merchandise in there. You've been buying Crest from us for 25 years and all of a sudden you're going to walk across the aisle and buy all of your apparel from us? Maybe their experience with apparel because of the price points we did have and the quality was such that seeing a sweater for $35 when they are used to the quality they get when they do pick up that sweater for real casual activity for $9, in their mind are they going to equate the fact that we're going to a $35 sweater that we've improved the quality the same amount? I think we went too far too fast.

Are you going to abandon it?

No, we're not going to abandon it. You just have to earn your way there. There is no reason we should not be able to sell apparel and home to those customers who are in our stores, but we've got to do it based on the product and the price points that we can build to. Maybe we should have taken a shorter margin. Maybe we should have put more quality into a $19 sweater rather than going to $35. Just rethink and that's what Eduardo [Castro-Wright, CEO of Wal-Mart's U. S. operations] and John Fleming [chief merchandising officer] are doing. How do you stay in this area that you are and just bump the edges out rather than jumping out of the circle entirely and staking out new territory entirely.

How are you going to reach out to the customers you targeted through your marketing?

You know what? I'm not a big fan of marketing. I mean, I think the guy Wal-Mart has running marketing is brilliant and a great find. I think at Wal-Mart Stores with 137 million customers that you put the right sweater in the right colors at the right price out there, you will sell that sweater. Marketing doesn't need to do anything other than to help understand who the customer is, customer insights, understand the individual stores so that you put those sweaters in the right kind of stores, and to communicate a message of the whole entirety of the store. You couldn't have spent enough marketing on Wal-Mart apparel last year to have changed the dial.