The first weekend of this holiday shopping season saw Wal-Mart
receipts total $1.25 billion. But the world's biggest retailer
wasn't always forthcoming with such information. Sherri Deatherage Green
reports.
Traditionally, communications at Wal-Mart have been kept in the family.
But outsiders are always going to get curious when that family is the
world's largest retail chain, and ranks number two on the Fortune 500,
with over a million "associates" (employees) in over 3,000 stores
worldwide.
"We are a very high-profile company, whether we want to be or not, and
becoming more so all the time," admits corporate affairs VP Jay
Allen.
"If you don't define yourself, someone else will, and chances are you
won't like it."
Although sharing information with employees remains a bedrock
principle, management historically saw little value in applying it to
the outside world. Great strides have been made in recent years to
"protect the brand," as Allen says, by communicating the good Wal-Mart
does. But the company still isn't prone to tooting its own horn.
Company founder Sam Walton worked for JC Penney, and later owned Ben
Franklin five-and-dime franchises. Those companies, along with rival
Kmart, may today rue Walton's intermingling of their ideas with his own,
as they struggle to compete against the 39-year-old discount giant.
Walton particularly embraced JC Penney's customer-focused philosophy,
and preference for the word "associates" over "employees." He emphasized
empowerment through information. Today, management communicates
twice-daily broadcasts to all stores, and sends monthly newsletters via
intranet.
Information sharing goes both ways, especially as the chain tries to
overcome market saturation by customizing product selections to local
tastes.
Wal-Mart continues to share much financial information with its
expanding international workforce. Walton himself clearly viewed the
practice as vital, but also as a calculated risk. "I just believe the
value of sharing it with our associates is much greater than any
downside there may be to sharing it with folks on the outside," he wrote
in his 1992 autobiography Made in America: My Story.
Walton's personal disdain for the press jumps out on the book's first
pages. He describes "these scavengers" who came to Bentonville, AR after
Forbes named him America's richest man in 1985. "I wasn't about to
cooperate with them," he wrote.
Moving beyond Walton
Most Wal-Mart traditions survived Walton's death in 1992, but the
realities of the global marketplace have loosened the company's tight
lips. Talk at board meetings now often turns to image, Allen
reports.
Information isn't released lightly, however. PR is viewed as a means to
support stores and sales. "PR should be a tool in executing a strategy,
not a strategy in and of itself," Allen says.
Perhaps illustrative of this philosophy was the May decision to stop
selling sales data to companies like AC Nielsen (which plots purchasing
trends), because competitors benefited more than Wal-Mart did. Vendors
now can access Wal-Mart's point-of-sale data only from its proprietary
RetailLink system.
Corporate philanthropy is one subject Wal-Mart does like to talk
about.
The emphasis on publicizing good deeds is in some ways related to one of
Wal-Mart's perennial communications challenges: the big-box issue.
The size of the company and its individual stores makes it a target for
critics. Not everybody wants to live near a humongous building that
draws heavy traffic. Some detractors go further, blaming Wal-Mart for
the demise of downtown, on-the-square merchants. Communicating
real-estate issues is a major focus of the company's six-person state
and local government affairs unit.
Corporate affairs director Betsy Reithemeyer stands prepared with facts
to counter big-box opponents. When Wal-Mart comes to town, local
economies do change, she admits. The local shoe store might have to move
or revamp its stock. But Wal-Mart creates jobs and draws shoppers from
other communities, Reithemeyer contends.
Yet the company recognizes the need to publicize what it gives back to
communities. Philanthropy efforts are local, with employees selecting
charities and designing their own fundraising activities.
In the wake of September 11, Wal-Mart gave more than supplies. It
publicized the $12 million-plus that the company and its
employees donated, the merchandise shipped to rescue workers from a New
York store that hadn't yet opened, and the warehouse space it provided
the Salvation Army. It also became more charitable with information.
The chain normally wouldn't release sales data to The Wall Street
Journal, and wouldn't often make CEO Lee Scott available for live
interviews on the Today show. It did after the tragedy, however, to
reassure Americans that life was getting back to normal, Allen says. The
data illustrated that while sales of guns, gas cans, bottled water, and
TV antennas spiked immediately after the attacks, shopping pretty much
returned to normal patterns by the weekend. Demand for flags remained
high, of course.
Media relations
Journalists who cover Wal-Mart regularly say the communications staff is
responsive once they get to know you. Arkansas Democrat-Gazette reporter
Dan Zehr says media relations staffers return his calls promptly, even
if they can't always answer his questions. "Wal-Mart historically has
had the reputation of being guarded about its information," he says.
"That doesn't seem to have changed a whole lot."
One national reporter, however, isn't sure the company's stand-offish
reputation is accurate. "I think if you deal with them straight, they
deal with you straight," she says. The PR team responds even when
stories aren't flattering, she adds.
In addition to the ever-present big-box issue, Wal-Mart has weathered
negative stories in recent years regarding labor problems (namely its
foreign sweatshops and low employee representation in American labor
unions). Allen's biggest labor challenge has been in-house, though -
attracting heavyweight PR talent to a small town in the Arkansas
hills.
Wal-Mart's in-house PR staff has grown to about 40 people since Allen
came from Fleishman-Hillard six years ago, but not without considerable
effort. The population of northwestern Arkansas stands at about 250,000,
thanks in no small part to Wal-Mart's economic impact. Still, attracting
two-career families is difficult unless the spouse not employed by
Wal-Mart goes to work for one of the many vendors who set up shop near
their biggest customer. Thus, Wal-Mart depends on Fleishman to help plan
and carry out its communication strategies, APCO for assistance on legal
issues, and New York's Graubard Group and Little Rock's Mitchell
Marketing for grand openings.
PR pros who put high value on posh office space need not apply at
Wal-Mart, either. Corporate head-quarters occupy a converted
warehouse, while the company cafeteria serves chicken nuggets and mashed
potatoes.
But working in plush surroundings is not the attraction here. Former AP
reporter Bill Wertz recently joined Wal-Mart's PR team from Phillips
Petroleum in Bartlesville, OK. "I really think Wal-Mart is the most
interesting company in the world today," he says, munching a cold
sandwich. "I don't know that any company touches people's lives in as
many ways as Wal-Mart does."
WAL-MART
SVP of corporate affairs: Jay Allen (reports to EVP of administration
Michael Duke)
Other key communications staff: Director of corporate affairs Betsy
Reithemeyer (philanthropy); director of state and local government
affairs Bob McAdam (includes real-estate issues); VP of national
government affairs Norm Lezy (Washington); international corporate
affairs manager Maria Rodriguez; PR VP position vacant; IR handled by
CFO Thomas Schoewe
Communications staff: About 40 employees
Agencies: Fleishman-Hillard, agency of record. Also project work by APCO
in Washington, DC, Graubard Group in New York, and Mitchell Marketing in
Little Rock, AR
PR Budget: Less than $10 million annually.
