Wal-Mart Chairman Lee Scott can speak at a large corporate conference about sustainability initiatives being more about the bottom line than it is about brand image.
But I don’t buy it.
Yes, I believe Mr. Scott did save money greening supply chain and adopting renewable energy technologies. Approximately 350 of their stores and facilities in Texas use wind energy. They have a laudable vision and monster environmental goals: “To be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain people and the environment.”
(If you want to create a green trivial pursuit game, you can download 23 sustainability fact sheets here)
Why, then, did this big box leader create so much press, hire scads of environmental consultants, speak at The big boys green conferences, and earn a place in the green business debate?
Sure, I believe Mr. Scott was smart. He figured out that in a business of his size, waste equals a lot less profits, and that the bottom line was important driver for sustainability. But he went further than saving money, he invested in new technologies. His company spent some of their resources on research; and training. And, in the end, it helped his brand image with some of the enviros – at least the ones that go to green business conferences.
Brand image is a funny thing. You can’t touch it, but it’s visible and emotive. Brand image is an impression in the minds of the people you call your customers and stakeholders. Brand is even greater than emotion; it’s the experience we have when we interact with the created product, store, or service. And experience eventually translates into value, and “goodwill.”
“A brand’s value is merely the sum total of how much extra people will pay, or how often they choose, the expectations, memories, stories and relationships of one brand over the alternatives,” says Marketing Guru Seth Godin,.
And now, in the web 2.0 world, brand is also the many impressions or conversations created in various networks.
Arguably, consumers choose Wal-Mart over other retailers because of price, and sometimes, because it’s the only retailer around. The experience that Wal-Mart created by going green was ultimately, a smart business decision, but it also was part of helping their brand image. Which, a short while ago was in peril.
In 2006, Business Week, among other media sources, reported on Wal-Mart’s not-so-altruistic business practices:
It’s been that kind of year for Wal-Mart. The Bentonville (Ark.)-based company has been pushing hard to improve its public image, at a time when its financial fortunes increasingly depend on it.It’s come under heavy fire from workers and politicians, for everything from the low wages it pays workers to the small retailers it pushes out of business. That dark reputation has resulted in communities around the country taking on Wal-Mart, by trying to halt construction of new stores or forcing it to pay higher wages and benefits.
Had Wal-Mart wanted to, they probably could have dealt with some of these pressures by giving more to charities, and giving their workers health care. They could have, perhaps, strong-armed their supply chain and brought their prices down lower, without making a fuss about green initiatives. They could h ave closed a lot more stores, and not gotten involved with the complexity of green business.
But Mr. Scott turned the green light on; and Wal-Mart profits under a better light. Profits and image had to co-exist for this brand to make a comeback.
As much as Mr. Scott says he approached sustainability as a business decision, he also says, “If we as a company focus on waste, we can make Wal-Mart a better company and at the same time, become a better citizen.”
Wal-Mart has also been unpredictable and some-what hard to define brand. Are they evil or ultimately, a game changer? What is their place in our larger, vision of the economy? Perhaps Godin has a clue:
“If you want to grow a valuable brand, my advice is to keep awareness close to zero among the people you’re not ready for yet, and build the most predictable, emotional experience you can among those that care about you.”
Sources: Environmental Leader
Business Week
