Wal-Mart spinning web of sustainability™

Wal-Mart is intertwining food and sustainability issues as it seeks to build a position as a food retailer that can keep up the latest trends, and even set them. Although price remains the core of Wal-Mart’s selling proposition, the retailer insists it can address more than just the desire for a bargain.

To determine just what other factors are driving its shoppers, Wal-Mart developed the Live Better Index, a research initiative designed to keep track of consumer attitudes and align assortment with evolving customer preferences. Wal-Mart also has identified five products—compact fluorescent light bulbs, organic milk, concentrated/reduced-packaging liquid laundry detergents, extended-life paper products and organic baby food—that it will track to understand critical customer purchasing patterns.

Traditionally, Wal-Mart has taken an incremental approach to organics, but, lately, has been getting beat up over the category. Having said it was expanding organics, the retailer got hit by activists who said Wal-Mart’s efforts weren’t matching its rhetoric.

Wal-Mart, though, has been approaching sustainability and organics somewhat differently. It has set out to be a leader in sustainability but remains deliberate and specific as regards organics, adjusting assortment according to customer demand in various stores and markets.

One result has been Wal-Mart becoming more active in organics outside of the United States. In Canada, Wal-Mart made a strong commitment to organics as it opened its first supercenters last year.

“The key is that this is relevant with the customer,” Wal-Mart Canada president and ceo Mario Pilozzi told Retailing Today at a ceremony unveiling the supercenter openings in November 2006. “You will see more organic product in Canada because the customer is looking for it.”

Similarly, Wal-Mart is expanding organics in Britain, and recently Mike Duke, vice chairman, told investors that organics expansion is an integral part of efforts to make ASDA-division execution more customer-centric.

By entwining sustainability and organics, Wal-Mart may be able to stay ahead of developments in critical issue areas through operations, remain with the customer on the sales floor and get on the right side of consumer opinion in the marketplace, all at the same time.