Report from Champion University: Wal-Mart’s Andrew Ruben

Yesterday morning, an impressive number of Wal-Mart vendors remembered to show up at the John Q. Hammons auditorium to catch Andrew Ruben, Wal-Mart’s VP of Strategy and Sustainability, speak on the company’s sustainability efforts.  Sustainability?  Isn’t that so 2006?  . . . Not so fast.  Mr. Ruben was there to remind everyone that sustainability is a constantly-evolving, ongoing initiative at Wal-Mart, and one that by all accounts seems to be in its infancy.  That clearly is the exciting part for Mr. Ruben, who did a great job of recounting the benefits, obvious and unforeseen, realized thus far along with the many opportunities that lie ahead for Wal-Mart’s suppliers, customers and shareholders.  After all, Wal-Mart has made it clear that its sustainability efforts aren’t about tree-hugging philanthropy, yet they also have been quick to embrace any happy outcomes from the wookier side.

Mr. Ruben stepped out from behind the podium and launched into the latest updates on Wal-Mart’s fuel efficiency goals, with a fleet of Wal-Mart trucks serving as a backdrop.  Wal-Mart had set a goal of a 35% improvement in fuel efficiency within three years and has achieved a 15% improvement within the last two.  On-board truck technology will take Wal-Mart up to 28%; an astounding number when one considers that every gallon of improvement in fuel efficiency translates to $49 million that “gets passed down to shareholders and consumers.”

I was surprised to learn that lighting represents one third of the cost of running a Wal-Mart store, so with LED lights using half the energy of fluorescent (and without taking the cool out of the cooler), the 500 stores that have been retrofitted to LED might be making some utility companies pretty unhappy.

Okay, all of you “what’s in it for me?” vendors, we’re getting to the juicy part . . .

First, an open letter from me to the still-unnamed supplier who took their car seats out of the box in favor of a nested, bagged store presentation.

Dear Sustainability Star, Congratulations!  First the Saturday meeting with Lee Scott himself singing your pioneering praises, now you are being trotted out in Wal-Mart Power Points as an example of sustainability-a- its- best . . . an example for all to follow.  Why, I can practically HEAR the weeping and gnashing of teeth from your competitors!  Tell me, have the straight-from-the-top accolades, greenie kudos and double-digit sales increases gone to your head yet? How about that crazy bonus where your car seat nests reduce shrink (Who knew that moms were loading baby food jars in those now-obsolete boxes before check out)?  Some guys have all the luck . . .  Would HAVE to be something like getting Oprah’s kiss for your latest tome, right?  What are you going to do for a second sustainable act?  Sorry!  No buzz kills allowed!  This is your time in the sun!  Bask!

Seriously, would you rather step out now and grab the limelight with the world’s largest retailer or wait ala-RFID in the rafters while others throw shade?  Wal-Mart wants you to make a move, even if it means reducing the brand billboard that is your space on a Supercenter shelf.  You’re competing against companies that are (or will soon) take all of this very seriously and will do so in ever more creative ways.  As Mr. Ruben stated toward close, it’s not a matter of “if” but “when” and we’ll add that you really don’t get that many opportunities to stand out in these days of sea-of-sameness retail.

Back to the stats . . . Wal-Mart’s tireless, finger-wagging admonitions against incandescent lighting are paying off!  Market share has tripled in the last nine months and, with every bulb switch adding up to $30.00 per year in utility savings and 500 pounds of coal, well you’d have to be a spendthrift or a meanie to resist the switch.  Wal-Mart’s goal is to sell 100 million of those squiggly things (equating to a $3 billion savings) and they are over 80% of the way there.  Mr. Ruben called it a “big milestone” that they are on track to hit that very goal.  I’ll say.

Perhaps you’ve seen some version of a ticking world events and population-growth-through-the-ages clock?  I have, yet I never tire of watching them and Mr. Ruben’s insertion of one in the preso certainly helped drive his point home.  With every dot representing one million people, we watched as dots migrated from continental coasts toward interiors, then jumped oceans and exploded into clouds of worldwide population growth.  6.6 billion people are on the planet right now and we’re careening toward ten, creating a “tremendous opportunity” to reach “broad, aspirational goals,” including for Wal-Mart to be supplied by 100% renewable energy, to create zero waste, to sell products that sustain resources and the environment, and to align the supply chain around sustainable product innovations.

. . . And speaking of aggressive goals and innovation, Mr. Ruben cited NCR’s idea to print both sides of a register tape as yet another example of suppliers taking up the mantle and realizing beyond-the-obvious benefits in the process.  Two-sided register tape saves paper of course, but it also cuts down on check-out time as associates spend less time changing out those tapes.

One point that Mr. Ruben made really stuck with me and reminded me of just how different Wal-Mart’s approach to sustainability has been when compared to other corporate initiatives . . . many of which really ARE all smoke and mirrors.  Wal-Mart didn’t just assign a committee to the issue then start sending out press releases; the company has truly rallied around sustainability by scrutinizing every possibility, involving every division of the company and encouraging every supplier and associate to do the same.  In the process, people have risen to the occasion and provided creative solutions that would never have been possible within an isolated Wal-Mart silo.  The more people who are involved, the more things happen.

“When you take better care of employees, they take better care of customers . . .” The last phase of Mr. Ruben’s presentation centered around Wal-Mart associates, and more specifically, how those associates are creatively participating in the company’s nine-month-old “Personal Sustainability Project.”

Launched in six stores and clubs, Wal-Mart’s Personal Sustainability Project or PSP now has 655,000 associates taking personal responsibility for their own well-being and that of the planet by quitting smoking, reducing carbon footprints and composting in droves.

Mr. Ruben shared insights from his own individual encounters with Wal-Mart associates, furthering his belief that store associates are taking sustainability, health, and wellness quite seriously AND playing it forward.

A few questions from the audience revealed why front-and-center opportunities such as plastic bag reduction may be further down the road.  At the store level, Wal-Mart is starting at the back of the store and moving forward under the premise that the waste generated there is easier to quantify and manage.  From there, Wal-Mart will take back-of-the-store best practices literally forward throughout the store where changes will no doubt be more visible to consumers.

One supplier raised a valid concern around packaging and size reduction within categories for which size really does matter.  How can you pioneer packaging reduction in gift sets, for example?  Won’t the customer perceive reduced value as well?  Clearly there are no easy answers; however, returning to the oft-cited All Small and Mighty example certainly makes sense in my opinion.  Laundry detergent, a category in which bigger has always been better in the Supercenter environment . . . now everyone is coming out with concentrated formulas that reduce package size considerably, and brand presence right along with it.  Consumers get the value; however, will that always be the case?  It will be interesting to see how all of this plays out in multiple categories and how suppliers will retrench after any unsuccessful attempts.

Mr. Ruben is working directly with some suppliers under their “BEEP” and “SEEP” concepts (Business Energy Efficiency Program and Supplier Energy Efficiency Program respectively), in order to mitigate what he referred to as a “take, make and waste” model; a “one way model” in which materials are taken from the ground, something is made of them, then the finished products are eventually thrown away.

I walked away inspired by Wal-Mart’s efforts and truly excited about the many ways this retailer will impact the planet “for good.”

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: