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The Walmart Paradox

3p Contributor | Thursday July 23rd, 2009 | 3 Comments

Why U.S. Consumers Perceive Walmart to Be the Most and Least Socially Responsible Company in the Nation
By Raphael Bemporad and Mitch Baranowski

walmart paradox
In our agency’s recently published 2009 BBMG Conscious Consumer Report, we asked 2,000 U.S. consumers to name the most and least socially and environmentally responsible company in the nation. It was an open-ended question, meant to get at baseline brand awareness on this front. Curiously, one company topped both lists: Walmart.

Why?

For fans of the global retailer, the finding underscores all that Walmart has done to become a leader in sustainability, including the recent news that it plans to launch a comprehensive sustainability index for its 60,000 vendors. But for many critics, it signals that Walmart’s PR machine might be doing its job, getting the word out about positive developments while skirting larger, more complex issues such as its big-box carbon footprint or worker issues like sustainable wages and the right to air grievances.

From where we sit as brand strategists and marketers, we know the realities are more nuanced, and we recognize that a single study cannot provide all the answers. Still, based on what we know and our experience to date, here are a few of the dynamics we believe to be at play in what we call the “Walmart Paradox”:

A Triple Benefit.
Interestingly, BBMG’s research finds that the nation’s most conscious consumers care more about price than conventional shoppers (73% of enlighteneds vs. 66% of all consumers saying price is a “very important” product attribute). And keeping prices low, quality high and products easily accessible is part of being socially responsible. While Walmart scores big in meeting consumers first with these practical benefits, it has also gone to great pains recently to communicate its social/environmental benefits (e.g., carbon-neutral building, carbon-efficiency in shipping, a goal to operate with 100 percent renewable fuels like solar and wind) and its tribal benefits with messages about the good we can do if, for example, each of Walmart’s 200 million customers starts by replacing an old lightbulb with a more efficient compact fluorescent.

Under the banner of “Save Money. Live Better,” Walmart delivers the combination of practical, social and tribal benefits that consumers increasingly seek when making purchasing decisions. (source)

Size Matters.
Walmart’s reach allows it to do more consumer education in one fell swoop than many federal programs combined: when the retail giant drops an in-store catalog about its 500+ eco-friendly options (e.g., certified fair trade coffee from $5.88 a pound), that’s a very powerful bit of awareness raising with consumer needs and priorities positioned squarely at the center.

Inside-Out.
Since Lee Scott, the company’s former CEO, mandated the charge toward sustainability in 2005, Walmart has worked hard to learn from the experts, including many vocal environmentalists that are friends of ours, to reduce its impact in smart, cost-effective ways. And it has engaged its employees in the effort as well, deftly framing sustainability in terms that relate to an individual’s health and wellness. (On a related note, sensing a change in the wind under an Obama administration, in early July Walmart announced it would join previous critics like the Service Employees International Union and Center for American Progress to support providing insurance to all employees.)

Long Shadows.
Despite the depth and aggressiveness of its sustainability goals, four years is a short window to shift perceptions. For a company long known for its ruthless maneuvers to outdo local competition and maximize sales of inexpensive goods made in countries thousands of miles away, the process of re-imagining its reputation is clearly a long one. Sites like WakeUpWalMart.com and WalMartWatch.com continue to pressure the company on many fronts, and some skeptics remain unconvinced.

As these dynamics play out, it’s clear that Walmart is leveraging its influence to elevate the conversation and innovate solutions that are shaping practices and perceptions about the intersection of commerce, sustainability and community.

Takeaways for Marketers
What are the takeaways of Walmart’s scoring both the most and least socially responsible spots in our survey?
For us, perhaps the most important is the integration of corporate social responsibility (CSR) with the company’s brand communications and corporate culture. CSR is no longer about reporting incremental progress to a small set of stakeholders like environmental advocates; it now holds the potential to be a consumer-facing, brand-building, culture-shifting platform that changes how we think, work and take action in the marketplace.

It is quickly moving beyond company-centered monologue and well-intentioned education to meaningful 360-degree dialogue, engagement and empowerment. It is looking beyond efficiency gains to ask more challenging questions around socioeconomic justice and corporate governance.

As our research confirms, we are experiencing a reset moment in which more consumers are reflecting on what truly matters in their lives and focusing on brands that deliver both value and values. Expect the CSR landscape to change rapidly. New business paradigms like TOMS Shoes (where the company and cause are one in the same) will exert pressure on legacy operations to be more transparent and more creative in breaking down silos in sourcing, marketing, community relations and corporate giving.

And new consumer movements, emboldened by social media and other technologies, will remake markets in delightfully unexpected ways with their small, dedicated actions adding up to something greater than any marketing campaign ever could have imagined.

What’s your take on the Walmart Paradox? One thing’s for certain: It’s about to get interesting.
_____________________
bbmg_small%20logo.jpg Raphael Bemporad and Mitch Baranowski are co-founders of BBMG, a nationally recognized branding and marketing agency dedicated to creating innovative brands that engage and inspire today’s increasingly conscious consumers.
Footnotes:

Source: 2009 BBMG Conscious Consumer Report. When asked unaided which companies come to mind as the most socially or environmentally responsible companies, seven percent (7%) of 2,000 U.S. consumers named Walmart, followed by Johnson & Johnson (6%), Procter & Gamble (4%), GE (4%) and Whole Foods (3%). Walmart also topped the list of the least responsible companies (9%), along with Exxon Mobile (9%), GM (3%) and Ford (3%), Shell (2%) and McDonald’s (2%). Interestingly, 41% of those surveyed could not name a single company that they consider the most socially and environmentally responsible.

Source: At Wal-Mart, Labeling to Reflect Green Intent, New York Times (July 16, 2009). Walmart executives have been clear about elevating sustainability as a core attribute that appeals to younger, more conscious consumers, “especially those born from 1980 to 2000.”


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  1. July 23, 2009 at 10:31 am PDT | Sherie Winston writes:

    Great post! I found similar results about perception and CSR while researching CSR, communications and jobs for Georgetown University’s Center for Social Impact Communication. Read my response at https://digitalcommons.georgetown.edu/blogs/csic/

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  2. July 28, 2009 at 7:24 am PDT | carol cone writes:

    Very well said.
    Interestingly, Wal-Mart headed the top of socially responsible companies in the recent Landor/Burson study at about the same levels as it did around 2000. A few things I see: First socially responsible companies communications are not breaking through enough to really imprint with consumers. Hopefully less expensive social media will help in the future, as WM and others really perform in the goodness dance of walking the talk internally and externally. Companies need to embrace social efforts that are core to their business so they can evolve to what we call at Cone: Better Business: Greater Good.
    Keep up the great research and great work.

    Reply Or REGISTER HERE if you are new.

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