Wednesday, November 15, 2006

Wal-Mart Holiday Faux Pas Provides Important Commerce Lessons

In a major policy change, Wal-Mart reversed last year's decision to eliminate the word “Christmas” from their stores. News of their 2005 policy to have all store signage say, “Happy Holidays” and forbidding store associates from saying, “Merry Christmas” caused a backlash in the form of boycotts from Christian shoppers. Learning from their mistake, Wal-Mart has reversed this policy by allowing religion-specific holiday greetings at their stores for the holiday season of 2006.

Media reports immediately declared that Wal-Mart had shifted their focus to the Christmas holiday. This was not, however, what Wal-Mart has done. To the contrary Wal-Mart has expanded their holiday greeting program to include people of all religions wherever possible.

Wal-Mart has long shown tremendous expertise in dealing with controversial consumer issues. A policy reversal is one of the most delicate of all controversial issues with which a business must deal. For example, when Kmart determined it was no longer politically correct to sell guns in their stores it made an announcement condemning the usage of guns. They pulled guns from stores in all 50 states. In Alaska, where the right to bear arms is exercised by an overwhelming percentage of residents, several groups decided to boycott Kmart. Management restocked guns in the Alaskan stores, however never dealt with the way they had insulted the Alaskan populous. This was a contributing factor in destroying customer loyalty and the northernmost state -- a state that would ultimately see all Kmart stores close.

There are four main lessons for us to learn from the skillful handling of the situation by Wal-Mart:

1. Do not let the media define your business decisions. When the media reported that Wal-Mart had changed from “Happy Holidays” to “Merry Christmas” Wal-Mart took charge of the message by dispatching spokespeople to all major broadcast media outlets. They had to clarify the message that Wal-Mart was not favoring Christian customers by this policy change. They spelled out that the new policy was to greet customers with the appropriate greeting. For example, Muslim customers will be wished "Blessed Eid!" for the Muslim holiday at the end of December. Similar greetings will be used for Hanukkah and Kwanzaa.

2. Listen to your customers. Although most business owners listen to consumer groups, Wal-Mart listens to the cash registers. When consumer groups began complaining last year about the Happy Holidays policy they held judgment until the cash registers told them they had made a mistake. Unfortunately too late to react for the 2005 season.

3. Keep your reaction proportionate. Wal-Mart was also wise in knowing that non-Christians make up an important part of their customer base. Therefore they needed a policy that addressed as many demographics as possible within their customer base.

4. Communicate with employees. Knowing that this policy reversal would get tremendous attention, Wal-Mart took the time to ensure associates were well aware of the new policy. This is not an easy task for an employer with more than one million employees, but Wal-Mart recognized the need to make this important investment.

According to Multicultural Business Council (MBC) spokesperson and retail expert Rick Weaver, “the number of choices consumers have in satisfying their needs dictates that the savvy retailer must address the individual demographics of their customers. No longer can businesses whitewash its product assortment, marketing plan, or visual displays to a generic consumer if they want to be successful.”

MBC works with companies and organizations to address the cultures of their customer and support bases. It has been their experience that shifting the focus from the traditional broad-paintbrush generic approach to an highly targeted programs will net excellent results in both sales and profits.