Northern exposure breeds global best practices - Canada - Wal-Mart Canada - Brief Article

DSN Retailing Today,  June 10, 2002  by Mike Duff

Tags: best practice, Wal-Mart Stores Inc.

• E-mail
• Print
• Link

Wal-Mart Canada has developed into a major strength. In addition to a solid base of nearly 200 discount stores, whose success in the pantry business, among other areas, helped generate a healthy increase in operating profit last year, the region also has developed into an incubator of sorts for global best practices.

About two years ago, Wal-Mart encountered' a couple of recent graduates turned entrepreneurs who had developed a new line of candies through a company they established called Kraves. The meeting turned out to be globally momentous. The line, based on a recipe developed by the grandmother, was unique enough to get Wal-Mart's attention--and the rest, as they say, is history.

"These were two young university graduates marketing the recipe and starting to distribute the product, called Clodhoppers. It was a kind of unique combination of cashews, carmel and fudge, very sweet, but palatable. They brought candy to the buyer to sample and the buyer decided to try it. It was on Canadian shelves first and proved very popular in all regions of the country," said Wal-Mart Canada spokesman Andrew Pelletier.

After a time, U.S. consumers discovered Clodhoppers and became intrigued. Within a short time, the product was prepared for a U.S. introduction. "Now, it is distributed across the U.S.,' said Pelletier. "It's a great Canadian success story. Kraves is one of the fastest-growing companies in Manitoba. Not just because of sales at Wal-Mart Canada, but sales in the U.S. and other things we've been able to do together, as well."

Kraves has appeared in Wal-Mart Canada television advertising, which the company uses to high-light its involvement with national manufacturers and other businesses, but which also gave the product additional exposure throughout the country. Nurtured by Wal-Mart, the company s success has permitted it to bring out a second flavor even as it builds distribution.

Thus, with Clodhoppers and Kraves, Wal-Mart bolstered its image by working to grow a Canadian company, got a hot new product and was able to assist other company divisions in building sales.

"Wal-Mart, in any country, can offer help to the local economy and an opportunity to grow businesses in home countries," said Pelletier. "That feels great."

While Clodhoppers is an example of a product development effort that Canada was able to offer the United States, cross-border cooperation certainly doesn't only flow one way. "The operative words are: global best practices," Pelletier said

One best practice element that Wal-Mart has been able to translate beyond U.S. borders is in girl's apparel. Broad-line retailers clearly have set their sights on tweens, and Wal-Mart Canada has transported a successful U.S. brand across the United States to build business among the girls who constitute the category and, also critically, their parents. "A best practice we adopted from the United States was the mary-kateandashley line of tween apparel," said Pelletier. "It has been extremely successful in Canada."

Wal-Mart Canada rolled out mary-kateandashley for spring and it has proven itself to be a strong draw for girls aged 6 to 14. The brand also has gained an enthusiastic following in apparel at Wal-Mart's U.S. stores since it was launched last year.

Prelaunch exceptions were such that Wal-Mart was counting the line as a hit even before Canadian consumers got their hands on it. Product arrived at stores on Feb. 22 and, subsequently, Canadian consumers immediately took to the new label. "It's been one of our most successful product launches," said Pelletier.

Best practices initiatives don't just flow between the United States and Canada, though. Several initiatives that Wal-Mart Canada has developed over the past several years are getting tried out much further afield.

"We developed last year a new baby center concept, bringing all the baby-related products into one area of the store with common fixturing and so forth, sort of a store-within-a-store," said Pelletier. "Now, that is being adapted in China, Mexico, Argentina, Puerto Rico and Brazil."

A second merchandising initiative adopted and developed by Wal-Mart Canada that's getting wide play as a best practice regards footwear. "We also introduced a new footwear department with new fixturing and a layout that is very modern and spacious," he said. "The new shoe prototype based on it is being tested in Puerto Rico, Brazil and Argentina."

With all the store developments, though, it's possible to miss the bigger picture. By working together to find and share best practices, Wal-Mart managers from throughout its various global markets have a chance to come together, learn and work in new ways.

"One of the most exciting things about this organization right now is that so many innovative things are being done to meet the demands of consumers in specific parts of the world, The more we travel, meet and explore these possibilities, the more we come up with and the more likely we will find some that will be appropriate for relocating. It's a great creative process," said Pelletier.

COPYRIGHT 2002 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2002 Gale Group