"Capital isn’t scarce; vision is" – Sam Walton
Sam Walton could be one of the most understated and under-recognized names in the history of the United States. Much to his delight, his influence on the very way that we live went largely unrecognized for most of his life. There can be few people who have made such an impression on the lives of every family in the country than Walton. His iconic Wal-Mart stores are everywhere, the largest chain of retail stores and responsible for a considerable proportion of the entire retail industry. Wal-Mart has become so influential that its financial reports and regular trading projections represent much awaited news on Wall Street. The company that Sam Walton founded ranks number four on the list of Fortune 500 companies, behind only General Motors, Ford and Exxon.
Walton personified the true meaning of the American dream and is responsible for opening up an army of company stockholders and employees to similar dreams. He was a child of the Great Depression and from a very early age showed considerable charisma, ambition and drive. In school and college, his sporting ability was evident and he was judged to be "most promising" of his class, regularly. From a very early age he showed ingenuity by working as a newspaper delivery boy, a herdsman and in a variety of other positions, just to earn money to help his struggling family get by.
Following wartime service, Walton was at the center of the re-emergence of the American economy. He had the foresight necessary to understand how complex social and demographic changes were interacting with the re-emerging economy. Fundamentally, he saw how the ways of doing business were changing and needed to change even further. His business acumen was ideally placed to carry him forward as this type of change unfolded.
While Walton may have flown beneath the radar for much of his life, the phenomenon that he created was nothing if not controversial. He was certainly aware of this controversy, but shrugged it off and believed that he was merely hastening what was inevitable. His vision helped to change the look of the retail industry forever and the knock on effects of his creation can be seen even today as we view how things are likely to change in our own future.
Walton’s vision centered around logistics. He understood that people want to buy products right there and then and that delays were not acceptable. The shelves of his very first store, opened in 1945, were always stocked with the correct goods at low prices. He would buy goods at the lowest price and pass on savings to the customer. Through accelerated volumes, he could negotiate even lower rates and thus created a very healthy sales phenomenon.
Walton started to learn lessons at an early age, as many people did not like his approach to business. Nevertheless, the pitfalls and problems that were placed in his way only strengthened his resolve. "I had to pick myself up and get on with it, do it all over again, only even better this time," as he put it.
He was to open a signature variety store in Bentonville, AR, the town that still hosts the world headquarters of his empire today. "Walton’s Five and Dime" was the name of the store that now features as the company’s visitor center. A chain of stores followed and as business progressed, he focused on larger and more comprehensive stores, spreading the reach across many of the Southern states.
The first Wal-Mart opened in 1962 in Rogers, AR and this was to mark the beginning of the company boom. Sam Walton was determined to try and market American-made products where he could and launched a considerable effort to find such manufacturers who could supply an increasing amount of merchandise to his chain at highly competitive prices.
Wal-Mart’s motto is "we sell for less, always." Walton perfected this model, ensuring that the way Americans shop changed forever. Small store owners were rightly upset, as they found that they simply could not compete with this business model. Homely, town center stores disappeared in favor of the giant Wal-Mart centers springing up in the suburbs. More so, Walton was shifting the focus of power away from the manufacturer and more towards the consumer, another trend that was to grow sharply in postwar America. "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else."
It is interesting to note that when Walton opened his first Wal-Mart store in 1962, Target and Kmart also emerged during that same year. Walton was not afraid of competition though and aggressively set out to find locations for new stores, using a private airplane to pinpoint the best locations and moving forward at breakneck speed. He made sure that he progressed technologically and is also credited with helping to pioneer merchandising and correct inventory control.
By 1985, his low-profile had run its course and Forbes magazine determined that he was in fact the richest man in America, due to his Wal-Mart stock. He was at once revered and ridiculed, as some people, bolstered by populist press, rued the passing of the traditional retailer and our concentration on big-box stores, cluttering and polluting the countryside.
Nevertheless, Walton presided over a restructuring of the American landscape, certainly from a retailing perspective. Today, each one of us relies on supermarkets and superstores and our quaintly named "shopping villages" inevitably include either a Wal-Mart or a Target store as an anchor.
Today, Wal-Mart has taken on the role of the leader in culture and society. The company understands that it has responsibilities and is championing the cause of environmental change. The phenomenon that Sam Walton created will likely live for ever and is the legacy of the all-American man who died in 1992 at the age of 74.