Sam Walton is the founder of retail giant, Wal-Mart. Walton started with a chain of about 15 stores and jumped on the discount retail bandwagon in the sixties with great success. In 1958, he was named by Forbes magazine as the richest man in America. With 39% of his company’s stock holdings, Walton secured a place for himself in retail history.
1. Discount Retailing
Traditional retailers were not happy about businessmen, like Sam Walton, who were looking to make a name for themselves in the discount retailing world not only because they didn’t want to give up control of the market place but because it meant a loss of customers.
2. First Wal-Mart
Walton was a relatively successful businessman when he seized the opportunity to make a name for himself in the discount retail business. On July 2, 1962, at the age of 44, he opened his first Wal-Mart store, in Rogers, AR. That same year, S.S. Kresge launched K Mart, F.W. Woolworth started Woolworth and Dayton Hudson began its Target chain.
3. Business Strategy: Cut Costs
Walton’s business strategy was simple: cut costs. He looked for every opportunity available to cut his costs including eliminating the middle man, lowering manufacturer’s profit margins and making sure that the price on store shelves reflected the costs cut.
4. Setting Up Shop Strategically
Walton began opening stores wherever he had the opportunity to set up shop. He would fly over potential sites and survey the land. He thought hard about where to set up shop, making sure that he built at intersections and between towns.
5. Computerized Operations
Walton realized early on that the key to making his business grow at the fastest rate possible was to learn how to computerize merchandise controls in his operations. Computerized operations allowed Walton’s business to become the icon of just-in-time inventory control and sophisticated logistics which ultimately gave Wal-Mart a competitive advantage.
6. Richest Man in America
Walton’s business savvy made him the richest man in America according to Forbes magazine in 1985. He personified the American dream and his charisma made him an example to his employees.
7. Spoiling Small Town Charm
Alot everyone was happy about Wal-Mart’s rapid growth and expansion. Wal-Mart surpassed its competitors and was demonized by those who had been negatively impacted by the success of Wal-Mart. Small town merchants were especially hard hit by the low price leader. Wal-Mart was given a reputation of being a spoiler of small town charm.
8. Changing and Adapting
Sam Walton attributes his success not to undermining the small merchant and stealing his customers, but to seeing inevitable change and adapting to better meet the needs of the customer. Walton explained that anyone can be competitive with Wal-Mart, so long as they could find a way to compete.
9. Category Specific Companies
Companies who saw opportunities in spite of Wal-Mart’s low prices are now benefiting. Companies who operate under very specific categories can compete with Wal-Mart simply because they have a selection that Wal-Mart does not. Companies such as Home Depot, Barnes & Noble and Blockbuster all attract a customer because they can provide a very specific product or service not available at Wal-Mart.
10. Wal-Mart Online
Walton was also one of the first retailers to see the potential for internet sales. Wal-Mart online now provides customers with even more of the selection, convenience and low prices that they are looking for. A unique feature is free site to store shipping which gives the customer the convenience of selection options without the added cost of shipping.