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WalMart_May09 Wal-Mart and Sustainability: A Consumer Journey Omar Garriott Megan Ryskamp Kathryn Wendell Haas School of Business May 6, 2009.

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Presentation on theme: "WalMart_May09 Wal-Mart and Sustainability: A Consumer Journey Omar Garriott Megan Ryskamp Kathryn Wendell Haas School of Business May 6, 2009."— Presentation transcript:

1 WalMart_May09 Wal-Mart and Sustainability: A Consumer Journey Omar Garriott Megan Ryskamp Kathryn Wendell Haas School of Business May 6, 2009

2 WalMart_May09 A Wal-Mart World

3 WalMart_May09 Today’s Agenda Wal-Mart: the Corporate Force and the Corporate Citizen Overview of Project and Process Case Studies: Lessons Learned Store Visits: Lessons Learned Ideas and Scenarios Additional Recs and Implementation Q&A

4 WalMart_May09 Wal-Mart the Corporate Force Core Competency: Cost Leadership Passing Savings on to Consumer Ops and Logistics Supplier Pressure Volume and Scale

5 WalMart_May09 Overview of Project Scope The index: A “new global standard” ◦Several years away from launch ◦Components:  Energy & Climate (~45%)  Material Efficiency (~25%)  Natural Resources (~15%)  People & Community (~15%) ◦Being built by a team of experts and academics We focused on… ◦The intervening years ◦The consumer-facing piece ◦Breadth and creativity

6 WalMart_May09 Consumers Must be Brought Along in Advance of Index Rollout Customer Assessment Education & Awareness Attitudinal Change Behavioral Change In-store Interaction with Index

7 WalMart_May09 Process / Methodology Initial ResearchCase StudiesMeta Lessons LearnedBrainstorm Big BucketsIdea GenerationDistillation of Key IdeasScenarios to Illustrate Key IdeasAdditional Recommendations Selected criteria for evaluating case studies and ideas generated: Envelope-pushing AND do-able Relevance to Wal-Mart and index specifically Demonstrated success Potential to provide a competitive advantage to Wal-Mart Strategic alignment Potential revenue driver: More than just cost-cutting Deliverables: PPT Paper with full research / recs

8 WalMart_May09 RETAIL Marks & Spencer RETAIL Marks & Spencer PRODUCT Clorox PRODUCT Clorox THIRD PARTY Nutrition Facts Safeway Case Studies

9 WalMart_May09 1) Keep it simple!4) Connect to consumers’ lifestyle choices and hope5) Message “sustainability” in and out of stores2) Communicate the value of sustainable products6) Create your own sustainable brand3) Empower employees to be sustainability ambassadors7) Encourage active consumer participation Case Studies: Lessons Learned Synopsis

10 WalMart_May09 Nutrition FactsWeight WatchersTimberland Case Studies: Lessons Learned 1)Keep it simple!  Avoid confusing consumers with quantitative data or multiple labels

11 WalMart_May09 Energy Star Case Studies: Lessons Learned 2) Communicate the value of sustainable products  Emphasize low prices and high quality. Compare cost savings against conventional products. Safeway “O Organics”

12 WalMart_May09 Case Studies: Lessons Learned Marks & Spencer 3) Empower employees to be sustainability ambassadors  Provide training and incentives for employees to engage in sustainability initiatives.

13 WalMart_May09 Shopping at Wal-Mart can be overwhelming. Some observations surprised us. Store Visits: Earth Month

14 WalMart_May09 Wal-Mart has a broad range of sustainable products. In-store messaging around sustainability is confusing. Store Visits: Earth Month

15 WalMart_May09 Academic Research Findings Key Case Study Takeaways In-Store Observations MASSIVE Wal-Mart Brainstorm

16 WalMart_May09 Stakeholder Map NGOs Governments Local Communities Investors Associates Suppliers International Stores Companies: Direct, Indirect and Non- Competitors Media: On and Offline Consumers

17 WalMart_May09 The Hopeful Mom Concerns: safety, health, and education of my family Benefits of “in me” “on me” sustainability Hope for the future Shopping made easy Message value Education donations as reward “Live Better” lifestyle message The Hopeful Mom Concerns: safety, health, and education of my family Benefits of “in me” “on me” sustainability Hope for the future Shopping made easy Message value Education donations as reward “Live Better” lifestyle message Stakeholder Voices

18 WalMart_May09 The Curious Kid Purchase influencer Planet-friendly values Teacher assistance Build early brand awareness Give incentives for participation Sustainability a FUN way for kids to engage Speak in their language: youth celebrities, YouTube, class projects The Curious Kid Purchase influencer Planet-friendly values Teacher assistance Build early brand awareness Give incentives for participation Sustainability a FUN way for kids to engage Speak in their language: youth celebrities, YouTube, class projects Stakeholder Voices

19 WalMart_May09 The Eco-Savvy Hipster Viral communicator and influential source of info Skeptical audience Wal-Mart’s past reputation important Seek favorite eco- products: CFLs, fair trade, cleaning products Must surprise and exceed expectations Likely to accuse Wal-Mart of greenwashing Affordable sustainable lifestyle The Eco-Savvy Hipster Viral communicator and influential source of info Skeptical audience Wal-Mart’s past reputation important Seek favorite eco- products: CFLs, fair trade, cleaning products Must surprise and exceed expectations Likely to accuse Wal-Mart of greenwashing Affordable sustainable lifestyle Stakeholder Voices

20 WalMart_May09 The Informed Associate Sustainability as a motivator for associates Incorporated in new hire training Rewards (non-monetary) for knowledge/training Sustainability = FUN Involve friends & family Encourage associate – customer eco-interaction Won’t be the panacea Will reinforce community values The Informed Associate Sustainability as a motivator for associates Incorporated in new hire training Rewards (non-monetary) for knowledge/training Sustainability = FUN Involve friends & family Encourage associate – customer eco-interaction Won’t be the panacea Will reinforce community values Stakeholder Voices

21 WalMart_May09 Green Bins, Signs, Tags “Live Better” Brand Partnership Tags Sustainable Shopping List Eco Points for Schools Monthly Impact Update PSP Lesson Plans Games/Interactive Shopping Cart In-Store Sustainability Scanners Eco-Friendly Shopping Carts Eco Rewards Competition Earth Friendly Kid Product Demos YouTube, Kid Celebrities Organic/Local Foods Credible Partners Celebrity Tweets Electric Vehicle Recharge Stations Flagship Sustainable Brands/Products Robust Supporting Data Eco Deal Announcements Farmer Video Testimonies Green Belt Status Checkout Statement Train the Trainer Ask Me Badge Rewards & Bonuses Friends & Family Discounts Scavenger Hunt Customer PSP Participation Public Employee Blog Associate Training A FEW OF THE WINNING IDEAS

22 WalMart_May09 Implementation Short-Term Medium- Term Long-Term “Live Better” Brand “Green” signals Associate program Message across media Green Belts and PSP Champions School programs Partnerships Index launch plan Index launch Interactive store technology (carts, scanners) Plug-in parking lot Impact statement at check-out

23 WalMart_May09 For the next Haas team… How can Wal-Mart measure consumer readiness and success of the index? What should the roles of other stakeholders be? ◦NGOs ◦Governments ◦Competitors/Consortiums ◦Mass Media/PR How can Wal-Mart broaden the index to other countries? Can Wal-Mart leverage social media and web 2.0 to engage customers?

24 WalMart_May09

25 The Wal-Mart Associate

26 WalMart_May09 APPENDIX – Reference Slides

27 WalMart_May09 Wal-Mart the Corporate Citizen Be supplied 100% by renewable energy Create zero waste Sell products that sustain our resources and environment

28 WalMart_May09 LESSONS LEARNED MATRIX 1) Keep it simple 2) Connect to consumers’ lifestyle and hope 3) Message “sustainability” both in and out of stores 4) Communicate the value of sustainable products 5) Create your own sustainable brand 6) Empower employees to be sustainability ambassadors 7) Encourage active consumer participation Office Depot & Home Depot Target Whole Foods Starbucks Tesco Marks & Spencer’s “Plan A” Clorox GreenWorks Weight Watchers Safeway “O” Organics Energy Star Timberland Nutrition Facts Labels

29 WalMart_May09 Marks & SpencerTesco Case Studies: Lessons Learned 4) Connect to consumers’ lifestyle choices & hope  Clarify linkages to: health, well-being, a better future

30 WalMart_May09 Whole FoodsTarget’s Re-tote Case Studies: Lessons Learned 5) Message “sustainability” clearly and consistently in and out of stores

31 WalMart_May09 Safeway “O Organics” Home Depot Case Studies: Lessons Learned 6) Create your own sustainable brand  All stores must consistently stock it.

32 WalMart_May09 Case Studies: Lessons Learned Starbucks 7) Encourage active consumer participation

33 WalMart_May09 Metrics A variety of impact metrics (and leading indicators) can and should be used ◦Sustainable product sales vs. conventional ◦Uptick in sustainable product sales throughout the year (not just April) ◦Sales of sustainable products by category ◦# of Associates earning green belts ◦Average purchase sizes ◦Customer loyalty data (surveys and repeat customers)

34 WalMart_May09 High-Level Observations It’s the Journey, Not the Destination Sustainability Who??? Consistency is Key Rosy Cheeks “In Me,” “On Me,” “Around Me” Stronger Together

35 WalMart_May09 High-Level Observations It’s the Journey, Not the Destination The index should be one part of a larger sustainability journey that should start now. Awareness and education need to happen before the consumer sees it. Sustainability Who??? The word “sustainability” does not translate to most customers. Health and care for people and planet does. Consistency is Key Sustainability should be messaged consistently across stores, even if product mix is different. Rosy Cheeks Wal-Mart’s “red-in-the face” social issue will continue to be around employee conditions. But programs that support the index can be motivators. “In Me” “On Me” “Around Me” People care most about sustainability for certain products:. These are the categories that should be promoted as planet- friendly. Stronger Together Consumers will not trust Wal-Mart’s alone. Government, and other retail partners will be important.

36 WalMart_May09 External-Facing Score Simple message & icons Positive (not negative) message Single stamp icon Colors and pictures are better than numbers Separate sustainability into health, people, and planet Test indicators with Live Better Brand Supporting full information Launch on Earth Day 2012

37 WalMart_May09 Ask Cameron to Tweet about you!


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