Made in America
by Sam Walton
One of the rare books that’s both informative and entertaining.
Building one of the largest empires for retail, Walton’s success didn’t come from some special technological breakthrough or special way of life that he had. It was simply that he worked harder than others and hired others that worked just as hard as he did. In other words, the secret sauce to Walmart’s success was to brutally outwork their competition.
He also made the right investments along the way, focusing first on generating incredible demand at Walmart stores and later on building supply chains to handle it. In between, there was a lot of pain but by building the right kind of organization that expects and even thrives in these painful environment, Walton was able to grow and profit at levels unbeatable by competitors.
What’s truly interesting to me is how Sam’s club was formed. Discount retailing was the paradigm innovation that disrupted variety retailing. Wholesale retailing is the paradigm innovation over discount retailing. And despite their large position within discount retailing, Walmart was able to build Sam’s club and essentially disrupt themselves. That’s not to say that I’m pessimisstic about the future of Costco; in fact, the Costco’s I’ve visited are generally vibrant (crowded) stores that always have packed parking lots and packed shopping carts. On the other hand, Sam’s Clubs patrons generally only have a thin layer of merchandise in their carts. Perhaps that says something about a company trying to disrupt itself. It’s simply not their natural state.
With the rise of online retailing, perhaps there’ll be another paradigm shift. Currently, it doesn’t seem that online retail has been able to achieve the cost effectiveness of brick and mortar retail. Perhaps the future is an hybrid model of localized stores that supply everyday goods with the rest found online. Perhaps the future is massive distribution stores that stock everything at dirt cheap prices but are sparsely located. Maybe in another decade, we’ll be reading Made in America, Part 2, the rise of online shopping.
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