1984 was the first year I entered a Wal-Mart store. I was assigned to Poteau, Oklahoma, the county’s center with a population less than 10,000. This was a perfect community for Wal-Mart’s initial strategy. I was amazed by the store’s size compared to the size of Poteau. Its big box aside the main drag in town was a bit overpowering, but I felt they did their part to minimize it with their elderly greeter. Although Wal-Mart was 22 years old in 1984, it still owned a mere 0.3 percent of the U.S retail market at the time.
I soon found myself by-passing local stores and running to Wal-Mart to buy diapers and other sundries because it was the biggest store in this small town, had most of what I might need, I really had no branded retail outlet to consider as an alternative, and Wal-Mart had the lowest prices in town. As the years went on, and Wal-Mart began to penetrate more populace communities, I found that Wal-Mart was becoming more of my weekly life. I began to differentiate purchase decisions between commodities, which I gladly bought at Wal-Mart, and those reserved for my own indulgences, which I reserved for brand stores. Wal-Mart became my accepted outlet for everything from batteries to bar soap.
I reserved other retail outlets for my material comforts. My flavors, I bought from Fresh Markets. I bought the the highest quality electronic gadgets of the time from outlets like Best Buy. For a cruise, I chose to upgrade to Royal Caribbean. Witnessing this behavior, Wal-Mart introduced a few mass marketable selective brands as well. With a solid understanding of their market position and a drive toward lowest cost, Wal-Mart acquired eight percent of the entire U.S. retail market.
We have come full circle. Just as the shipping merchants were the kings of commerce pre-industrial age, Wal-Mart dominates the seas today. Wal-Mart’s shipping fleet is a testament to modern technology. Its sleek ships sail fully laden with cargo from China to American ports in 5 days, a full 4 days sooner than the average cargo ships used by others today. Importantly, Wal-Mart applied state of the art technology to drive down a major component of their business model. They had to counteract America’s trading deficits because these floating works of art sail back to China empty.
To achieve its retail dominance, Wal-Mart has honed its China strategy. Now, 80 percent of goods sold in Wal-Mart originate in China. The vast majority of China’s retail market is tied to giant outlets like Wal-Mart, Wal-Mart alone accounting for 12 percent of China’s exports. Our buying behaviors, China’s selling behaviors, and unfortunately net American job losses are intricately entwined through the market engineering of the world’s greatest multinational corporation, America’s largest retailer, and history’s largest company, Wal-Mart.