Less is More
November 18, 2003
An article in Fast Company about Wal-Mart's impact on the economy is getting a fair amount of discussion. I found comments at How to Save the World and Teledyn (where I found the article) interesting. (1QX)
Over the past several years I have developed a bizarre fascination with toothbrush technology. I am not a religious toothbrusher. I'm lucky to have no cavities but this comes from genes rather than brush. I admit, sometimes I forget, sometimes I have stinky mouth. (1QY)
Initially my fascination eschewed fancy electric or ultrasonic models. I sought out the toothbrush section of my local retailers to review the complex manipulation of plastic. Manipulations seeking, I thought, the fundamental form of the toothbrush. The ideal. The perfect tooth cleaning device. I sought these things not because I wanted perfect cleanliness but because I admire the union of form and function (and you should too!). (1QZ)
Of late the shelves have teemed with a multiplicity of devices (say it like Zappa), more than a body could possibly need. Many are powered. I recently saw and heard one of these powered devices in the mouth of a friend. I resisted for several days but now, I too have a whirring, spinning, gyrating device. Without the instructions and packaging I wouldn't know whether to put it in my mouth or up my butt. (1R0)
These toothbrushes are not cheap throwaways. The battery operated ones are up over seven bucks. Meanwhile, the fancier non-powered items are two to three dollars. (1R1)
As the years have passed what was once my pleasant fancy has now turned to ennui. Something is wrong in the toothbrush biz, and it's wrong elsewhere. (1R2)
(A momentary aside. It's curious to note the changes in definition of "ennui". Webster's 1913 edition: (1R3)
A feeling of weariness and disgust; dullness and languor of spirits, arising from satiety or want of interest; tedium. (1R4)
Wordnet (modern): (1R5)
n : the feeling of being bored by something tedious [syn: boredom, tedium] (1R6)
It's the weariness and disgust I want to imply here. With a liberal dash of despair and unwilling resignation.) (1R7)
The Fast Company article has some explanations: (1R8)
There has been an explosion of "innovation" in toothbrushes and toothpastes in the past five years, for instance; but a pickle is a pickle is a pickle. (1R9)
Why the square quotes on innovation? Well, it turns out that in order to maintain any profits in the face of the Wal-Mart machine, a manufacturer has to make new stuff for which Wal-Mart has no historical data (which they leverage in negotiations): (1RA)
The way to avoid being trapped in a spiral of growing business and shrinking profits, says Carey, is to innovate. "You need to bring Wal-Mart new products--products consumers need. Because with those, Wal-Mart doesn't have benchmarks to drive you down in price. They don't have historical data, you don't have competitors, they haven't bid the products out to private-label makers. That's how you can have higher prices and higher margins." (1RB)
Carey enters into mushy territory by saying "products consumers need". It would be more accurate to say products for which manufacturers are able to generate apparent need through marketing. A couple of paragraphs down the article: (1RC)
Bain's other critical discovery is that consumers are often more loyal to product companies than to Wal-Mart. With strongly branded items people develop a preference for--things like toothpaste or laundry detergent--Wal-Mart rarely forces shoppers to switch to a second choice. It would simply punish itself by seeing sales fall, and it won't put up with that for long. (1RD)
(Bain is Carey's employer) (1RE)
So, what have we got here? To survive, manufacturers have to do three things: (1RF)
- Cut costs as much as possible. Much of the time this means moving manufacturing offshore. (1RG)
- Continuously create need for new "innovative" products, through marketing and diversification. (1RH)
- Constantly maintain brand loyalty through marketing. (1RI)
More shiny useless advertising for more shiny useless products. A growing cycle of emptiness. (1RJ)
(Emptiness that pervades. A world that floats around on sound bites and colorful pictures. What's holding this stuff up? It's becoming increasingly difficult to participate.) (1RK)
Dave Pollard suggests some solutions, mostly revolving around sanctions and tariffs to maintain prices. I don't think this is enough and besides it's based in the belief that some nation is better than some other: it is retaliatory and thus subject to escalation. (1RL)
The real issue is the stock market. When a company is solely responsible to its shareholders and the vast majority of shareholders are operating at a distance (through mutual funds and other instruments) corporate responsibility is inappropriately directed and valued through inappropriate measurements. Dave says: (1RM)
And the answer is not to blame Wal-Mart either: They're doing what their corporate charter dictates, using their immense buying power (they sell a quarter trillion dollars worth of goods each year) to increase earnings per share, and in the process they have introduced some unarguably beneficial innovations into their, and their suppliers', business processes. (1RN)
Perhaps we shouldn't blame Wal-Mart, but we should blame their corporate charter. Earnings per share is a false requirement, created to support an artificial system, much like my guilty new toothbrush. (1RO)
Comments
Hrm. Thoughtprovoking and fascinating...and sort of intertwined with my rant of days past. However, despite the fact that I think Walmart is evil and the worst thing to happen to business in the US, it wasn't always this way. (1RW)
Sam Walton's vision was for a general/department store for small town America filled with goods made in the USA. This has long since been dropped since ol' Sam went to the express line in the sky. The vision and direction has changed and for the worst. I don't fault the Walmart board of directors or shareholders. I blame the 7 Walton kids that are jockeying for the best position of the fortune dear old dad left for them. (1RX)
And while I know your dislike of the stock market, I don't think it can all be pinned there. The stock market does shoulder some of the blame. The tech sector's blowup of the stock market created unreasonable expectations of the stock market that are still in place today despite the current economic climate. (1RY)
In fact, they reinforced the GenY/MeGen? idea of money for nothing...or at least products for as little as possible despite what the true costs are. It's a roundabout way to get there, but I think there is a direct connection. (1RZ)
The biggest problem here is the consumer driven society in combination with the media society. The movie Josie and the Pussycats, while on the surface is there to show Rachel Leigh Cook's hot body, actually is a great mocking of the way media drives kids to consumerism...and these kids take it with them through life. The worst part is that the Boomers aren't showing people why it's important to consider your purchases and what they really mean in terms of impact on society/jobs/etc. I hope, maybe, that kids growing up in factory towns that are suffering might clue them in...but I imagine in my cynical way that it will just enforce buying things as cheaply as possible. (1S0)
How do you break this cycle ? (1S1)
Let's tie it in to this...(and I'll probably post this in my journal) (1S2)
Today, the government announced that restrictions were being placed on Chinese textiles being imported into US in order to protect US textile jobs. This is basically in response to the textile unions having voter education meetings, getting their members registered to vote, and then basically saying that they would get all union members to vote for the Dems unless Bush did something. The response from a "large department store retail chain" (read: Walmart, the largest importer of Chinese textiles in the US) was that this would only hurt the consumer because it would drive up the cost of clothing that their store. (1S3)
Let's ponder this: (1S4)
1) How much would it really change the retail pricing ? $1 ? $2 ? More ? Less ? Let's get some numbers here. (1S5)
2) How does it change the actual cost if you consider that now a US textile worker will keep their job and will be able to spend the money they make more readily ? (1S6)
I'm getting all worked up again. Dammit. (1S7)
I think, Chris you miss the point: it's emptiness that provides. Brand loyalty and brand marketing are simply two sides of what we, as trop-oriented monkeys, have evolved to do: salute or challenge the silverback, he;s home, family, god, safety, and possibility. (1S8)
If it wasn't profitable, they wouldn't do it; if spam wasn't cost effective, there would be none. When a biology out grows itself, the evolutionary modalities fail. Sit back and enjoy the show: it does provide you with some extraordinary luxuries and unheard of freedom of individual action. Why, I hear soon gay people will be married, legally! (1S9)
trop = troop, but it's kind of a nice cross-lingual pun. (1SA)
butt, mouth, why choose? (1SB)
I just want a toothbrush that will fit in the stylin' toothbrush holder I bought a couple of years ago. The newfangled swirly puffy toothbrushes don't fit; I always end up buying the cheapest, skinniest, most minimalistic models. Which, really, is all we need. (1SW)