Article
NRF: Outgoing Wal-Mart CEO stresses opportunity
H. Lee Scott, Jr. emphasizes an upcoming period of opportunity for both the nation and the retail industry.
January 11, 2009 by James Bickers — Editor, Networld Alliance
During this morning's keynote address at the 98th annual NRF Convention & Expo, outgoing Wal-Mart CEO H. Lee Scott, Jr. emphasized an upcoming period of opportunity for both the nation and the retail industry.
Acknowledging that the just-ended holiday season was a tough one — "We've all just lived through it," he said — Scott noted that between a new administration in Washington and a new consumer attitude toward spending, the coming months will see a fundamental game change for retail.
"As a business, we have a responsibility to society. We also have an opportunity," he said. "Societal responsibilities and how we align them can strengthen a business." As an example, he pointed to Walmart's $4 generic prescription program, which he said has been a fantastic success for the company, as well as a boon to shoppers.
Scott said his company saw the tough times coming two years ago, when gas prices started the initial climb that would eventually land them in $4-a-gallon territory. He noted that 20 percent of his company's customers have no checking account and live paycheck-to-paycheck, making the pain evident sooner rather than later.
But even so, sales are good on certain products, especially at the core of the assortment — a lesson he said all retailers need to adopt. "You had better understand your customer, and you had better understand your inventory," he said, pointing to a recent 25 percent increase in flat-panel TV sales, even in the throes of a recession. "People still have money, but it's very targeted toward what they want. You just have to manage your business in so much more detail."
Perhaps it was the fact that he is retiring in a mere 12 days, but some of Scott's comments were surprising given his position with the world's largest retailer. He pointed to what he called a fundamental change in consumer behavior toward frugality, one that he said might endure even when times get better.
"I'm not sure, from a society's standpoint, that that is all that bad," he said, noting that shopping has become less of a recreational activity for many, especially younger people. "(The poor economy) is very unfortunate, but in some ways it's healthy."
When asked about the big lessons he learned in 30 years in retail, he stressed the need for international retailers to manage at a local level, rather than with a monolithic, one-size-fits-all philosophy.
"We somehow thought that the seat of all retail knowledge was Bentonville, Arkansas," he said with a smile. "When we got to Argentina and Germany, we found out that this was not the case. You really have to manage locally."
Acknowledging that the just-ended holiday season was a tough one — "We've all just lived through it," he said — Scott noted that between a new administration in Washington and a new consumer attitude toward spending, the coming months will see a fundamental game change for retail.
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H. Lee Scott, Jr. speaks at NRF on Monday. |
Scott said his company saw the tough times coming two years ago, when gas prices started the initial climb that would eventually land them in $4-a-gallon territory. He noted that 20 percent of his company's customers have no checking account and live paycheck-to-paycheck, making the pain evident sooner rather than later.
But even so, sales are good on certain products, especially at the core of the assortment — a lesson he said all retailers need to adopt. "You had better understand your customer, and you had better understand your inventory," he said, pointing to a recent 25 percent increase in flat-panel TV sales, even in the throes of a recession. "People still have money, but it's very targeted toward what they want. You just have to manage your business in so much more detail."
Perhaps it was the fact that he is retiring in a mere 12 days, but some of Scott's comments were surprising given his position with the world's largest retailer. He pointed to what he called a fundamental change in consumer behavior toward frugality, one that he said might endure even when times get better.
"I'm not sure, from a society's standpoint, that that is all that bad," he said, noting that shopping has become less of a recreational activity for many, especially younger people. "(The poor economy) is very unfortunate, but in some ways it's healthy."
When asked about the big lessons he learned in 30 years in retail, he stressed the need for international retailers to manage at a local level, rather than with a monolithic, one-size-fits-all philosophy.
"We somehow thought that the seat of all retail knowledge was Bentonville, Arkansas," he said with a smile. "When we got to Argentina and Germany, we found out that this was not the case. You really have to manage locally."
Associations / EventsRetail - GeneralRetail - WarehouseRetail - Supermarkets & Grocery StoresRetail - Department StoresCustomer ServiceConsumer BehaviorMarketingNational Retail Federation
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