[Dialogue] Now We Can Shop at Wal-Mart

Tue Jan 2 15:07:06 EST 2007

The Energy  Challenge 
Power-Sipping Bulbs Get  Backing From Wal-Mart  
As a way  to cut energy use, it could not be simpler. Unscrew a light bulb 
that uses a lot  of electricity and replace it with one that uses much less. 
Skip to next  paragraph 
The Energy Challenge 
While it sounds like a promising idea, it turns out that  the long-lasting, 
swirl-shaped light bulbs known as compact fluorescent lamps  are to the nation’
s energy problem what vegetables are to its obesity epidemic:  a near perfect 
answer, if only Americans could be persuaded to swallow  them. 
But now _Wal-Mart  Stores_ 
(http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=WMT) , 
the giant  discount retailer, is determined to push them into at least 100 
million homes.  And its ambitions extend even further, spurred by a sweeping 
commitment from its  chief executive, H. Lee Scott Jr., to reduce energy use 
across the country, a  move that could also improve Wal-Mart’s appeal to the more 
affluent consumers  the chain must win over to keep growing in the United  
States. 
“The environment,” Mr. Scott said, “is  begging for the Wal-Mart business 
model.” 
It is the environmental movement’s dream:  America’s biggest company, 
legendary  for its salesmanship and influence with suppliers, encouraging 200 
million  shoppers to save energy. 
For all its power in retailing, though, Wal-Mart  is meeting plenty of 
resistance — from light-bulb makers, competitors and  consumers. To help turn the 
tide, it is even reaching out to unlikely partners  like _Google_ 
(http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/h
tml-companyprofile.asp&symb=GOOG) , _Home  Depot_ 
(http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companypr
ofile.asp&symb=HD)  and Hollywood. 
A compact fluorescent has clear advantages  over the widely used incandescent 
light — it uses 75 percent less electricity,  lasts 10 times longer, produces 
450 pounds fewer greenhouse gases from power  plants and saves consumers $30 
over the life of each bulb. But it is eight times  as expensive as a 
traditional bulb, gives off a harsher light and has a peculiar  appearance. 
As a result, the bulbs have languished on  store shelves for a quarter 
century; only 6 percent of households use the bulbs  today. 
Which is what makes Wal-Mart’s goal so  wildly ambitious. If it succeeds in 
selling 100 million compact fluorescent  bulbs a year by 2008, total sales of 
the bulbs in the United States  would increase by 50 percent, saving Americans 
$3 billion in electricity costs  and avoiding the need to build additional 
power plants for the equivalent of  450,000 new homes. 
That would send shockwaves — some intended, others  not — across the 
lighting industry. Because compact fluorescent bulbs last up to  eight years, giant 
manufacturers, like _General  Electric_ 
(http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custo
m/nyt-com/html-companyprofile.asp&symb=GE)  and Osram  Sylvania, would sell far fewer lights. Because the bulbs 
are made in Asia, some American manufacturing jobs could be lost. And  because 
the bulbs contain mercury, there is a risk of pollution when millions of  
consumers throw them away.  
Michael B. Petras, vice president of  lighting at G.E., concedes that “the 
economics are better with incandescent  bulbs.” 
All that has only spurred Wal-Mart to  redouble its efforts — and, in typical 
fashion, it is asking those who may be  hurt by the change to help achieve 
it.  
During an extraordinary meeting in Las Vegas in early  October, competing 
bulb makers, academics, environmentalists and government  officials met to 
ponder, at times uncomfortably, how Wal-Mart could sell more of  the fluorescent 
lights.  
The proposals discussed at what Wal-Mart  dubbed the “light bulb summit” 
ranged from the practical (advertise the bulbs on  the back of a Coke 12-pack) to 
the quixotic (create a tax on incandescent bulbs  to make them more 
expensive).  
Selling 100 million bulbs “is not a slam  dunk by any stretch of the 
imagination,” Stephen Goldmacher, an executive at  Royal Philips, the Dutch company 
that is one of the world’s largest light-bulb  makers, told the group. “If this 
were easy, it would have happened  already.” 
The attendees did not need to look far for  evidence. Wal-Mart had asked the 
owners of the Mirage Hotel and Casino, where  the conference was held, to 
commit to using the energy saving bulbs in its guest  rooms in time for the 
meeting. The hotel politely declined.   
It is not alone. Compact fluorescent bulbs,  introduced in the United  States 
with much fanfare in 1979 by Philips  just as the nation’s second energy 
crisis of the decade was getting under way,  have never captured the public 
imagination.  
The new bulbs — lighted by sparking an  efficient chemical reaction, rather 
than heating a metal filament — were  ungainly, took several seconds to light 
up and often did not fit into  traditional light fixtures.  
Since then, refinements have made them far  more convenient to use, reducing 
their size and price as well. But Wal-Mart sold  only 40 million in 2005, 
compared with about 350 million incandescent bulbs,  according to people briefed 
on the figures.  
And it would have stayed that way unless  Wal-Mart decided to go green. More 
than a year ago, Mr. Scott, the company’s  chief executive, began reaching out 
to some of environmental groups, telling  them that Wal-Mart, long regarded 
as an environmental offender, wanted to become  a leader on issues like fuel 
efficiency and greenhouse gas  emissions. 
Mr. Scott viewed such a move as a way to use  Wal-Mart’s influence to improve 
the environment, cut costs and, of course,  burnish the company’s bruised 
image. In September 2005, Mr. Scott and Andy  Ruben, Wal-Mart’s vice president 
for strategy and sustainability, drove 6,000  feet to the Mount Washington 
Observatory in New  Hampshire with Steve Hamburg, an environmental studies 
professor at _Brown  University_ 
(http://topics.nytimes.com/top/reference/timestopics/organizations/b/brown_university/index.html?inline=nyt-org) , and Fred  Krupp, 
the president of the advocacy group Environmental Defense.   
At the summit, where scientists measure _climate  change_ 
(http://topics.nytimes.com/top/news/science/t
opics/globalwarming/index.html?inline=nyt-classifier)  24 hours a  day, the men discussed global warming, acid rain, the hole in 
the ozone layer  and what Wal-Mart could do about them. 
“You need to look at what is being sold on  the shelf,” Mr. Hamburg recalled 
telling Mr. Scott over a  dinner of turkey and mashed potatoes. He began 
talking excitedly about compact  fluorescent bulbs. “Very few products,” he said, 
“are such a clear winner” for  consumers and the environment. 
Soon after returning from the trip, Wal-Mart  publicly embraced the bulbs 
with the zealotry of a convert. In meetings with  suppliers, buyers for the chain 
laid out their plans: lower prices, expanding  the shelf space dedicated to 
them and heavily promoting the  technology. 
Light-bulb manufacturers, who sell millions  of incandescent lights at 
Wal-Mart, immediately expressed reservations. In a  December 2005 meeting with 
executives from General Electric, Wal-Mart’s largest  bulb supplier, “the message 
from G.E. was, ‘Don’t go too fast. We have all these  plants that produce 
traditional bulbs,’ ” said one person involved with the  issue, who spoke on 
condition of anonymity because of an agreement not to speak  publicly about the 
negotiations.  
The response from the Wal-Mart buyer was  blunt, this person said. “We are 
going there,” the buyer said. “You decide if  you are coming with us.” 
In the end, as Wal-Mart suppliers generally  do, the bulb makers decided to 
come with the company.   
Philips, despite protests from packaging  designers, agreed to change the 
name of its compact fluorescent bulbs from  “Marathon” to “energy saver.” To 
keep up with  swelling orders from the chain, Osram Sylvania took to flying 
entire planeloads  of compact fluorescent bulbs from Asia to the United  States. 
“When Wal-Mart sets its mind to something  with a narrow objective like that, 
they are going to make it happen,” said Jim  Jubb, vice president for 
consumer product sales at Sylvania.   
At the same time that it pressured  suppliers, Wal-Mart began testing ways to 
better market the bulbs. In the past,  Wal-Mart had sold them on the bottom 
shelf of the lighting aisle, so that  shoppers had to bend down. In tests that 
started in February, it gave the lights  prime real estate at eye level. Sales 
soared.   
To show customers how versatile the bulbs  could be, Wal-Mart began 
displaying them inside the lamps and hanging fans for  sale in its stores. Sales nudged 
up further.   
To explain the benefits of the  energy-efficient bulbs, the retailer placed 
an education display case at the end  of the aisle, where it occupied four feet 
of valuable selling space — an  extravagance at Wal-Mart. Sales climbed even 
higher.   
In August 2006, the chain sold 3.94 million,  nearly twice the 1.65 million 
it sold in August 2005, according to a person  briefed on the numbers. 
But to reach 100 million, Wal-Mart has to do  much more — and that, 
executives concede, is where the biggest challenges rest.  In the fall, the company 
began reaching out to competing retailers, Internet  companies and even 
filmmakers. 
The goal was to turn its sales campaign into  a broader cultural movement.  
One proposal, headed by Lawrence Bender, who  produced _Al  Gore_ 
(http://topics.nytimes.com/top/reference/timestopics/people/g/al_gore/index.html?inline=ny
t-per) ’s 2006 documentary,  “An Inconvenient Truth,” is to create a Web 
site that would track sales of  compact fluorescent bulbs at major retailers like 
_Walgreen_ 
(http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=WAG) ’s and _Target_ 
(http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/cust
om/nyt-com/html-companyprofile.asp&symb=TGT) . The  result would be a 
real-time map, with data collected by a third party, showing  how much Americans have 
saved by using the energy-efficient  bulbs. 
Mr. Ruben said such a map “helps consumers  see this as something bigger than 
buying a  bulb.” 
At the same time, Google and _Yahoo_ 
(http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&sym
b=YHOO)  are in  talks with Wal-Mart about how to use their search engines to 
promote the  bulbs. 
But Home Depot and Lowe’s balked at the idea  of cooperating with their 
larger rival. “We don’t think we need an organization  like that to sell more CFLs,
” said Ron Jarvis, the vice president of  environmental innovation at Home 
Depot, using the bulb’s industry  nickname. 
Then there is the mercury inside the bulbs,  a problem Wal-Mart is working 
with the federal government and environmental  groups to resolve, possibly by 
collecting the bulbs at its stores or off-site  locations for recycling.  
In the end, though, the biggest obstacle to  overcome is America’s love 
affair with cheap,  familiar-looking incandescent bulbs — a habit 130 years in the 
making.   
For that to turn around, Wal-Mart will have  to persuade its traditional 
consumers that it is worth paying a bit more at the  checkout counter to save a 
significant amount money down the line, a seemingly  simple task that few 
companies ever accomplish. It is particularly difficult at  a retailer that has long 
emphasized “always low  prices.” 
“It has taken the American public forever to  grasp this,” said Charlie 
Jerabek, the chief executive of Sylvania. 
Helen Capone encapsulates the challenge. Ms.  Capone, 68, said she “curses 
the energy company every month” because of her  electricity bill and loves the 
five-year-old, trouble-free compact fluorescent  bulb in her attic. But she won’
t switch to the energy-saving bulbs in the rest  of her house in Secaucus,  
N.J. “They are not the prettiest  things in the world,” she said, surveying 
the bulbs at a  Wal-Mart. 
That has put Wal-Mart in the strange  position of racing ahead of its 
customers and coaxing them, bulb by bulb, toward  energy conservation. 
“We start with the premise,” Mr. Ruben,  “that customers make good choices.”

Cynthia N.  Vance
Strategics International Inc.
8245 SW 116 Terrace
Miami, Florida,  33156
305-378-1327; fax 305-378-9178
_http://members.aol.com/facilitationfla_ 
(http://members.aol.com/facilitationfla) 

Want  to build your own facilitation skills? 
Want to meet facilitators from around  the world and in your own backyard? 
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2007 
Portland, Oregon -- March 8-10, 2007.  See _www.iaf-world.org_ 
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