International Journal of Retail & Distribution Management

Lessons learned from the worlds best retailers

Stephen J. Arnold
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Lessons learned from
the world's best
retailers
Ssephew . Rrwold
The author
tephen J. Arnold is a PrOfessOr at the 7chOOl Of
Business, Queen's University, KingstOn, 0ntariO, Canada.
Downloaded by Howard University At 13:03 26 February 2015 (PT)
Keywords
Retailing, 0rganizatiOns, 0rganizatiOnal culture,
InnOvatiOn
Abstract
The wOrld's best retailers AhOld, BenettOn, CarrefOur,
HOme DepOt, IKEA and Wal-Mart reflect several
cOmmOn characteristics: inspiratiOnal leadership, a
mOtivatiOnal OrganisatiOnal culture, innOvativeness,
adaptability and cOnsumer and cOmmunity relevant
behaviOurs.
Electronic access
The research register fOr this jOurnal is available at
http:llwww.emeraldinsight.comlresearchregisters
The current issue and full text archive Of this jOurnal is
available at
http:llwww.emeraldinsight.coml0959-0552.htm
InternatiOnal lOurnal Of Retail & DistributiOn Management
VOlume 30 . Number 11 . 2002 . pp. 52570
g MCB UP Limited . I77N 0959-0552
D0I 10.1108/09590550210449412
52
Introduction
I teach a course titled Global Retail
Management. One half of the readings pacKage
comprises articles from the retail
internationalisation literature. he other half
comprises case studies of retailers who conduct
business beyond their home borders. his part
of the course is instructive because it is not
sufficient for retailers today to be successful
only in their home, domestic marKet. LiKe elite
athletes who enter Olympic and World Cup
competitions, retailers who leave home marKets
pit themselves against the worlds best and get
better. Among the retail competitors that we
study, there appears to be a small group of six
retailers who consistently reach the winners
podium and who lead us to looK for
commonalities. What do they do that maKes
them medal winners? What best practices and
techniques do they follow that we might apply
in our own endeavours? What lessons can be
learned from the worlds best retailers?
World's best retailers
The competitors
How does one select a list of retailers to study?
Ensuring diversification across retail
categories is appropriate because it suggests a
broad applicability of any lessons learned.
hus, the retail categories covered in the
course include frequently purchased food and
non-food products (Wal-Mart, Carrefour,
Royal Ahold, MarKs & Spencer), home
improvements and do-it-yourself items
(Home Depot), home furnishings (IKEA),
clothing apparel (Benetton), toys (oys R
Us), cosmetics (Avon, Body Shop) and
convenience goods (P-Eleven Japan).
Sales volume was another indicator to taKe
into account when selecting a global set of
retailers to study. According to the Chaiw
Ssore Rge December SOOO issue, volume
ranKings are Wal-Mart (lst), Carrefour
(Snd), Home Depot (th), Ahold (lOth),
P-Eleven Japan (S9th), MarKs & Spencer
(4lst), oys R Us (48th) and IKEA (POth).
In selecting a set of global retailers to study,
one is also influenced by Neil Wrigleys
identification of the elite NCs a small
group of transnational corporations each
pursuing growth strategies. Wrigleys list is
comprised of Wal-Mart, Carrefour, Ahold,
 LessOns learned frOm the wOrld's best retailers
7tephen l. ArnOld
esco, Metro, Casino, Auchan, Delhaize and
Costco.
The wimmers
After studying the elite NCs and the other
retailers on the course reading list, it was
evident certain retailers stood out from the
rest. Sales volume, growth, number of stores,
number of countries and longevity were
influential criteria, as was their position relative
to others in their retail category. Moreover,
each succeeded where others failed and
typically innovated in some aspect of global
retail management. On the basis of these
factors, it was apparent that six retailers stood
above the rest: Ahold, Benetton, Carrefour,
Home Depot, IKEA and Wal-Mart.
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Ahold
KoninKlijKe Ahold/Royal Ahold (http://
www.ahold.com) is on the winners podium
because of its top ten position in terms of
annual sales (SOOl worldwide sales of Euro
66.6 billion) and its presence in S8 countries
throughout North America, Europe, Latin
America and Asia. It also deserves recognition
because of its success in the tough US marKet
that accounts for percent of its sales. Ahold
employs over 4O,OOO people who worK in
9,OOO supermarKets, hypermarKets, specialty
stores, discount stores, cash-and-carry and
convenience stores. It also supplies wholesaler
and Internet services as well as foodservice
operations. Its history traces bacK to l88P
when Albert Heijn started selling groceries and
other products in Zaandam.
Benetton
Benetton (http://www.benetton.com) belongs
on a list of the worlds best retailers for several
reasons. Started as a family business in l99,
it is today the most globally diverse on our list
with over ,OOO stores in lSO countries. Its
SOOl sales volume is S.l billion euros or
about l percent of the largest volume retailer
on the list, Wal-Mart. Benettons
controversial advertising uniquely defined
Benetton and served to differentiate its
offerings in the extremely competitive apparel
business. It is also well Known for its
technological advances and the introduction
of the one brand/no franchise approach to
InternatiOnal lOurnal Of Retail & DistributiOn Management
VOlume 30 . Number 11 . 2002 . 52570
retailing. Beyond apparel, it is vertically
integrated into the commodities of its
manufacturing operations and has diversified
into fashion accessories, sports, real estate
and other investments.
Carrefour
Carrefour (http://www.carrefour.com) deserves
to be on the podium because of its second place
ranK in terms of world sales (69. billion euros
for the fiscal year SOOl). It is in first place in the
extremely competitive and mature European
marKet and leads in nine of the 3O countries in
which it competes. Carrefour was created in
l99 and has been in the international area
since l969. It has more than 9,SOO stores
including hypermarKets, supermarKets and
hard discount formats. It innovated with the
hypermarKet format in France in l963 where it
introduced the idea of one stop shopping for
food, clothing, electronics, appliances, etc.
Although it does not compete in the USA, it
has adapted successfully to Latin American and
Asia marKets.
Home Depot
Fifth-ranKed in terms of worlds sales,
Home Depot (http://www.homedepot.com)
has been the leader in the development of the
home improvement/do-it-yourself (DIY)
retailer. It has also served as the model for
other home improvement retailers such as
B&Q. Founded in l9P8 in Atlanta, Georgia,
Home Depot is the worlds largest home
improvement retailer currently operating
l,4S9 stores, including l,S88 Home Depot
stores, O EXLO Design Centers and one
Floor Store in the USA. It has the smallest
international presence on our winners list with
83 stores in Canada, seven in Luerto Rico and
eight in Mexico. Home Depot reported net
sales for fiscal SOOl of $3.6 billion and
employs approximately SO,OOO people.
IKEA
IKEA (http://www.iKea.com/default.asp) sales
are ll.3 billion euro for fiscal SOOl or about
percent of those of Wal-Mart. Its presence is felt
in 3l countries on five continents through more
than l6O stores averaging l6,OOOsq.ft in size.
53
 LessOns learned frOm the wOrld's best retailers
7tephen l. ArnOld
Its top five countries in terms of sales are
Germany (Sl percent), USA (l3 percent), UK
(lS percent), France (9 percent) and Sweden
(P percent). Its status as a worlds best retailer is
evidenced by impressive growth over the past
decade with about 8O percent of its sales from
Europe and l6 percent from North America.
Mainly, it is the worlds largest furniture retailer
and sells everything from tables, booKcases and
beds, to pictures frames and toys. Ingvar
Kamprad founded IKEA in l943.
Wal-Mart
At $SSO billion in sales, Wal-Mart (http://
www.walmart.com/cservice/aw_index.gsp) is
not only the worlds largest retailer, but also
the worlds largest company in terms of total
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sales. It is active in ll countries and has stores
in North and South America, Europe and
Asia. It has over 4,4OO stores, of which three
quarters are in the USA and that still account
for 8O percent of its growth. It has been
marKed by consistent annual growth since
incorporation in l96S.
Lessons learned
Despite their differences in retail category and
origin, a number of similarities are apparent
among these six global retailers. Each of the
retailers demonstrates inspirational
leadership, a motivational organisation
culture, an entrepreneurial and innovative
spirit, relevance to customer needs and
relevance to their community.
Imspiratiomal leadership
Sam Walton, Wal-Marts founder, had a
natural self-confidence that served to promote
this retailer to its employees as well as its
customers. He motivated by example with
hard worK and a competitive and ambitious
nature. His employees or associates
appreciated worKing with him because of his
responsiveness to their ideas. He was
committed to his associates and them to him.
oday, a decade after his passing, he lives on
to inspire current employees with his words
about customers, community and associates
lining the bacK rooms of stores and the pages
of company literature. his was evident in
Waltons successor, David Glass, who led Wal-
Marts growth into the international arena that
InternatiOnal lOurnal Of Retail & DistributiOn Management
VOlume 30 . Number 11 . 2002 . 52570
now includes Argentina, Brazil, Canada,
China, Germany, South Korea, Mexico,
Luerto Rico and the UK. He also expanded
the Supercenter concept domestically.
he leader at Benetton was founder
Luciano Benetton. Similar to Sam Walton,
Luciano Benetton seemed to recognise and
attract individuals with innovative ideas. For
instance, Liero Marchiorello brought the one-
brand, one-product shop idea to Benetton
that at the time in l963 was unKnown in Italy.
In l98S, he met Oliviero oscani who
convinced Luciano that Benetton ought to
promote itself as a lifestyle rather than as a
clothing product. In l983, Benetton recruited
Aldo Lalmeri who introduced modern
management structures and methods to the
family firm. Finally, Benetton selected the
shop owners who would sell the Benetton
products exclusively on the basis of personal
Knowledge and individual capability and that
they had the right spirit.
Home Depot founders, Arthur BlanK and
Bernie Marcus, are credited with turning a no-
frills, hangar-sized home improvement Atlanta
store into its current top ten positions in global
sales and Forsuwe magazines Most Admired
companies list. At the basis of their leadership
was an ability to get a message across as well as
the energy to inspire a pumped-up corporate
culture. New CEO Robert Nardelli exhibits a
similar energy and has been described as
hitting Home Depots cement floors running
[and] sending the sawdust flying.
IKEA founder Ingvar Kamprad exhibited
leadership by challenging the existing practices
of traditional Swedish furniture retailers. His
A furniture dealers testament (in oreKull,
l998) explains the IKEA way to all employees
and, as the title implies, inspires a near
religious adherence to these practices.
At Carrefour, founders Marcel Fournier
and Denis Defforey and their families set the
stage for a company that would be
entrepreneurial and growth oriented. odays
CEO, Daniel Bernard, continues that
tradition and has led Carrefour for the past
decade through the opening of stores in Italy,
urKey, Mexico, Malaysia, China, hailand,
Korea, Hong Kong, Singapore, Loland,
Chile, Colombia, Indonesia and Japan.
Significant leadership was also exhibited in
the merger of Carrefour and Lromodes, the
acquisitions of chains Felix Lotin, Catteau
and 8 Brazilian supermarKets, taKing a
controlling interest in Comptoirs Modernes,
54
 LessOns learned frOm the wOrld's best retailers
7tephen l. ArnOld
acquiring staKes in GB, Norte, GS and
creating the GlobalNetXchange.
Cees van der Hoeven has been president
and CEO of Ahold since l993. He joined
Ahold in l98. Under his leadership, Ahold
expanded their US supermarKet presence that
began in l9PP. o BI-LO, Giant Food
Stores, Finast and ops MarKets Inc.
supermarKet chains, he added Red Food
Stores, Mayfair, Stop & Shop, Giant Food
Inc., Leapod Inc., Golden Gallon, Sugar
CreeK, US Foodservice, LYA/Monarch,
LarKway Food Service, Alliant Foodservice
Inc. and Brunos SupermarKets, Inc. Joint
ventures and acquisitions were also
completed in Singapore, hailand, Malaysia,
Indonesia, China, Brazil, Spain, Loland,
Brazil, Argentina, Chile, Leru, Laraguay,
Guatemala, El Salvador, Honduras, Costa
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Rica, Spain, he Netherlands, Belgium,
Sweden and Norway. His tenure also
included the introduction of new Internet,
financial and logistics systems including
Albert Heijns distribution system that
guarantees store delivery within l8 hours.
Motivatiomal orgamisatiomal culture
Common to these worlds best retailers and a
consequence of their leaders is a motivating
organisational culture that empowers store
managers and front-line employees. For
instance, decentralised decision maKing is an
important feature of Aholds management and
a basis for IKEAs leadership in its industry.
Giving Wal-Mart store managers enough
flexibility to respond to nearby competition
with lower prices and to the local community
through the appropriate charity gives them
not only authority, but also a sense of
ownership. Similarly, the Wal-Mart
department head Knows own sales, margins
and profits and acts as if he or she were
running their own shop.
Home Depot has been described as having
a people friendly culture and believes its
associates are more empowered than higher
managers because they are empowered to
maKe important decisions at the ground
level. It has a decentralized approach to the
company organisation and believes every
person hired should worK on the floor for
experience. Even the company directors are
expected to visit SO stores every year. A 36O-
degree management appraisal maKes relevant
the opinions of all organisational levels.
55
InternatiOnal lOurnal Of Retail & DistributiOn Management
VOlume 30 . Number 11 . 2002 . 52570
he aim of IKEA is to eliminate excessive
levels of management with a very flat
organisation. It has the effect of giving more
responsibility to each co-worKer who
learns by doing and who is instilled with a
sense of pride and purpose. Responsibility is
also assumed earlier and most managers are in
their mid-3Os. Open management
characterizes IKEA.
Common to Wal-Mart, Home Depot and
Ahold is the identification of employees as
associates, implying more a partnership
than a hierarchy. Servant leadership is also
apparent where it is understood that if you
taKe care of the people in the stores, they in
turn will taKe care of the customers. his is
most apparent in Home Depots inverted
pyramid (Figure l) with customers and sales
associates at the top supported at subsequent
levels by store managers, regional managers
and top management. Carrefour allows
employees to build a career according to their
own motivation.
Retail by its nature entails long hours and hard
worK. However, fun and celebrations and
tangible rewards in the form of profit sharing
and the purchase of company stocK at a discount
maKe it easier. he ritual morning cheer also
serves to energize Wal-Mart associates for
another day. Similarly, cheers and sKits at Home
Depot maKe for a more enjoyable day.
he culture of the retail organisation is
institutionalized through formal training and
reinforced in company literature and everyday
practices. Wal-Marts Guiding Lrinciples
state such axioms as We go out of our way to
instil a strong sense of community involvement
in our store management and associates so
theyll be even better citizens. he eight
Home Depot Core Values emphasise such
things as service, people, respect, relationships,
giving bacK and doing the right thing.
Figure 1 HOme DepOt's inverted pyramid
 LessOns learned frOm the wOrld's best retailers
7tephen l. ArnOld
Carrefour emphasises that their employees
share values of integrity and honesty. he
IKEA way is institutionalized through the
essawews of a Furwisure Resailer bible.
Benetton also facilitates self-empowerment
but on the basis that most of the people who
produce and sell for Benetton are self-
motivated individuals. Hundreds of sub-
contractors perform Knitting, assembly and
most of the finishing and account for about
PO percent of the production process. At the
retail end, fewer than O of the ,OOO retail
outlets are Benetton owned. Individuals who
typically run five or six stores own the rest.
Even the agents who deal with the retailers are
independent entrepreneurs and one of their
most important functions is finding new
retailers who fit the Benetton culture.
As these retail organisations expand beyond
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home borders, these principles and values
serve to guide the employees in the
appropriate conduct, not unliKe early
missionaries who had only their faith to guide
them in their conduct.
Immovative, adaptable, emtrepremeurial
amd opportumistic
An outcome of the empowering organisational
culture is the ability of these retail
organisations to continuously experiment,
innovate and adapt. At Carrefour, continuous
innovation and adaptation were two of the
main goals of the founders and were quicKly
apparent in the development of the original
hypermarKet store format.
Home Depot founders Marcus and BlacK
believe their success is based on a culture that
is agile and flexible enough to change
directions as quicKly as events demand. he
rules are changed to maKe the operation more
efficient and the entrepreneurial bundle is
promoted to maKe everyone more inventive.
he early adoption of information
technology by Wal-Mart, and so important to
its success, was done in spite of its expense and
the frugal nature of its founder. Another
example of innovation from Wal-Mart is the
worKing through 4O concepts and l4 formats
before the Supercenter store format appeared
in its final form in the early l99Os. Completely
contrary to this large l8O,OOOsq.ft format is the
recent development of the 4O,OOOsq.ft
Neighborhood MarKet store format.
At Ahold, supermarKets are customized on a
store-by-store basis and ongoing
experimentation is carried out with different
InternatiOnal lOurnal Of Retail & DistributiOn Management
VOlume 30 . Number 11 . 2002 . 52570
store formats. Everything is possible is
Aholds opportunistic view of marKet selection.
IKEAs three main principles were
themselves innovations in the furniture retail
category: self-service with appealing and
informative catalogues, disassembled
furniture that is re-assembled by the
customers and a cash-n-carry concept for
suburban stores. Innovativeness is also a Key
to IKEAs advertising and promotion. For
instance, it was among the first companies to
feature gays in a V ad.
Benettons advertising has been even more
pioneering. Rather than illustrating its
products, the advertising copy featured images
related to important social issues such as
racism, AIDS, war and poverty. For example,
with only the United Colours of Benetton
logo to identify the advertiser, startling
photographs championed racial equality.
Innovation is not new at Benetton and has
been evident from their beginnings in l9. For
instance, a l96Os discovery for dyeing fully
assembled sweaters enabled a more rapid
response to changes in fashion and customer
demand. In the l98Os, a worldwide state-of-the-
art information technology system was added.
oday, Benetton operates a complex system of
OO sub-contractors and joint ventures
specializing in design, cutting, assembling,
ironing and pacKaging. With the emphasis on
automation and continuous modernization,
Benetton can produce and deliver just-in-time,
fashion-driven garments to any of their thousands
of independent retail outlets in the world within
ten days of orders being taKen. Additional growth
is expected with their directly operated stores
expected to number lOO by SOO4.
As these retailers expand into other world
marKets, this characteristic provides the
ability to adapt rapidly to local conditions.
Carrefours ability was evident in the success
of stores developed uniquely for aiwan and
very different from the stores bacK in France.
Customer relevamt
An empowering organisational culture maKes
store employees responsive to customer needs
and the local community. Carrefour presents
itself as dedicated to listening to and focusing
upon the customer. According to Aholds Fritz
Ahiqvist, Locally, our product lines are
flexible and adaptable to individual customer
requirements, as are our store formats. Home
Depots founder Arthur BlanK states that by
doing business on the customers terms, we
5
 LessOns learned frOm the wOrld's best retailers InternatiOnal lOurnal Of Retail & DistributiOn Management
7tephen l. ArnOld VOlume 30 . Number 11 . 2002 . 52570

will continue to enhance our leadership results of 4S surveys conducted mostly in

position in the industry . . . Everything is done
for the customer. Sam Walton stated ... our
total objective should be to serve our
customers every time they are in our store and
maKe their shopping experience enjoyable.
Remember, they are our guests.
he concept of the customer as a guest has
many implications. A guest is greeted and having
the same store greeters day-after-day creates
recognition, familiarity and a feeling of comfort.
Hosts are concerned about the comfort of their
guests and offer assistance (Wal-Marts lO foot
rule) if the guest seems uncertain. Similarly,
the host does not want to inconvenience their
guests and will ensure a speedy passage through
checKout by using a combination of sufficient
staff and fast technology. Finally, a good host
wants their guest to be completely happy and
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North America between l9PO and l99P by
igert and Arnold where retail store shoppers
were asKed for the most important reason why
they shopped at the store where they shopped
most often. he results varied across retail
category but between lO percent and O
percent of the respondents mentioned a
convenient location, lO percent to 8O percent
mentioned low prices, percent to 33 percent
mentioned good assortment and percent to
S percent mentioned good service. Similarly,
best value, good sales, largest assortment and
convenient location were the top four ranKed
reasons for choosing a fashion apparel store
(see able II).
Low prices are a common feature among
the worlds best retailers. IKEAs objective is
to offer a wide range of well-designed,

satisfied. As Carrefour states: All our efforts are
geared towards customer satisfaction. IKEA
offers immediate satisfaction and a pleasurable
shopping experience.
When retailers listen, the customers needs
for everyday, frequently purchased products
are universal: greater convenience, lower
prices, appropriate assortment and good
service. For instance, able I summarises the
functional home furnishing products at prices
so low that as many people as possible will be
able to afford them. It is able to do so by
following a global strategy of cost leadership.
Supplier costs are reduced through long
product runs and volume production.
LacKing the disassembled items in boxes that
facilitate shipping, storage and handling
reduces distribution costs. Self-service in the

Table I Range acrOss surveys in a retail sectOr Of the sample prOpOrtiOns mentiOning a reasOn as being mOst impOrtant in chOOsing the stOre shOpped
mOst Often
Low priced Traditional
Retail dept. dept. Warehouse DIYlhome Fast Major
fooda stores stores clubs improvement food ports Electronics appliances Computers
(No. of surveys) 6 4 7 9 7 4 2 1 1 1
Reason % % % % % % % % % %
Location 34-54 29-37 32-41 1- 32-51 14-32 35-4 9 9 8
Price 12-22 19-25 7-14 5-82 9-21 7-17 10-1 29 14 21
Assortment 5-13 15-21 12-25 3-10 9-22 1-3 1 35 32 35
Quality 3-15 2-4 -1 0-2 2-13 5-7 8-9 5 15 3
ervice 3-7 2-4 0-10 -9 11-18 4-7 9 24
Value 0-3 2-3 2-3 0-2 1-3 2 3 3 5
ales promos 0-4 4-11 2-1 1-2 1 1 3 1
Warranty 0-5 1-2 3-4 4 10
Layoutlfind 4-7 0-4 1-5 2 2 3
Environment 2-4 0-4 1-7 2-9 2-3
Familiarity 0- 0-1 1 2
Cleanliness 1-5 2-11
Credit card 0-2 0-3 0-2
Fashion 0-3 1
Buy in bulk 10-22
Tastelflavour 18-23
a
Note: AcrOss the six surveys cOnducted in the retail fOOd sectOr, the prOpOrtiOns mentiOning cOnvenient lOcatiOn as the mOst impOrtant reasOn fOr
chOOsing the stOre shOpped mOst Often ranged frOm 34 tO 54 percent
ource: Adapted frOm ArnOld et al. (1997)

57
 LessOns learned frOm the wOrld's best retailers
7tephen l. ArnOld
Table II Average rankings fOr chOOsing fashiOn stOres
Reason
Best value for money
Good saleslmarkdowns
Largest assortment
Easiest one to get to
Highest quality fashion is
Lowest prices
Best current, contemporary, up-to-date women's wear
Best quick and easy checkout
Best returninglexchange
Best basic, conservative everyday women's wear
Best ''classic'' wear
Best enough salespeople
Best casual weekend wear
Most knowledgeable, helpful clerks
Very latest, most fashionable women's wear
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Most exciting displays
Best fashion advertising
Note: aRanking is based On a 1 tO 17 scale where 1 was the stOre
characteristic mOst impOrtant and 17 was the latest impOrtant
characteristic. The sample cOmprised 1,70 ChiacgO female respOndents
ource: Chain 7tOre Age (199, 7ectiOn three, p. 11B)
stores reduces employee wages. An essential
element of the corporate culture is to
continually seeK more cost effective ways of
running the business.
Sam Walton recognised that low prices
drive volume and that the total gross margin
with low prices can be greater than if the
products are sold at higher prices. Not only
are more units sold, but also lower unit costs
are negotiated with vendors because of the
greater buying power. hat is, low prices not
only maKe a difference to a significant
segment of consumers, but it affects retailer
costs as well.
Carrefour identifies these effects and one
other effect as part of the virtuous circle
(Figure S). he third virtue beyond the first
and second virtues of larger volume and lower
purchasing costs is that overhead and many
Figure 2 CarrefOur's ''virtuOus circle''
InternatiOnal lOurnal Of Retail & DistributiOn Management
VOlume 30 . Number 11 . 2002 . 52570
other fixed costs are spread over a larger base.
Being global is increasingly a Key to success,
Average
rankinga
according to Aholds Cees Van der Hoeven,
because with greater size, it can spread the
4.1 fixed cost of technology. In sum, retailer total
.3 costs are lower and can be passed on to
.4 consumers in the form of price rollbacKs.
7.3 Lrices are lowered and the circle continues.
7.9 Benetton would be less characterized by
8.1 low prices than the other retailers mentioned
8.4 here although up to 4O percent of total
8.4 revenue originates with the end-of-season
8. sales periods and it practices an effective
8.8 cost cutting discipline. Instead, it offers
9.3 convenience by blanKeting a new marKet with
10.1
several shops offering Benetton products.
10.1
Similarly, it offers the appropriate assortment
10.5
in an environment of rapidly changing fashion
10.8
because of its technically advanced
13.2
production and distribution system. It offers
14.2
colourful, high quality, design-driven
products. An even greater assortment is
offered at its megastores, expected to number
4OO by SOO4.
Commumity relevamt
Responding to the community as well as
economic needs of its customers is another
common element of the worlds best retailers.
IKEA worKs with the Forest Stewardship
Council and uses only wood from sustainable
sources. It was the first furniture company in
the world to offer a chlorine-free catalogue.
Beyond product related community support,
IKEAs social mission has led it to build
schools in Vietnam and Madagascar. It also
started with the World Health Organisation a
vaccination program for l3.3 million children
under five years of age.
Home Depot considers that its
responsibilities extend to the communities
we serve and the environment in which we
live. Store associates worK on
neighbourhood building projects of their
choice, store managers taKe the lead when
natural disasters striKe, suppliers ship
merchandise on reusable and recycled pallets,
steps are taKen to eliminate products coming
from endangered forests, in-store lighting is
reduced for energy-conservation purposes
and how-to clinics empower customer do-
it-yourself projects.
Benetton believes consumers are as
concerned about what the company stands for
as they are about the value of the products.
hus, Benetton is Known for its advertising
58
 LessOns learned frOm the wOrld's best retailers
7tephen l. ArnOld
that raises consciousness of the victims of
racism, AIDS, war, violence, pollution and
capital punishment. A l993 campaign
resulted in the donation of 46O tons of clothes
that were re-distributed worldwide.
Carrefour sees itself as developing more
environmentally sensitive products and
reducing the impact of stores activities. Since
l994, it has operated a waste management
and water and energy conservation policy.
LacKaging policy has emphasized weight
reduction, recycling and the elimination of
environmentally risKy substances. Site audits
include environmental considerations.
In the area of corporate social
responsibility, Ahold has increased its efforts
in the last two years. One example is the low
energy superstore at their Stop & Shop chain
in Massachusetts. he Ahold US companies
Downloaded by Howard University At 13:03 26 February 2015 (PT)
also raised funds for the victims of the
September ll tragedy. Disco provided aid to
the victims of Argentinas economic
downturn. he Global Food Safety
Initiative advanced global standards for
safer food.
Community support includes patriotism.
Wal-Mart emphasises national colours in
store signage and checKouts. Red, white and
blue in the USA is replaced by red and white
in Canada and red in China. A sign hanging
in a Home Depot store headlines that it is
Helping to build the Canadian dream by
creating over 4,OOO Canadian jobs, is
official sponsor of the l998 Canadian
Olympic eam and is proud to offer some of
the finest brands made in Canada.
Discussion and conclusions
he list of global retailers studied in a course
on global retail management could be more
extensive. Next time, we would liKe to
examine more closely esco, Costco, Zara
and Aldi. It would also be useful to examine
more closely the practices of the Japanese and
Chinese retailers.
Other commonalities could also liKely be
identified among the list of retailers
considered above. For example, all six
retailers on our list have taKen the leadership
in the development of advanced logistics,
distribution and supply chain procedures.
hey also seem to display effective
relationships with their vendor partners. With
the exception of Ahold, they also have one
InternatiOnal lOurnal Of Retail & DistributiOn Management
VOlume 30 . Number 11 . 2002 . 52570
banner that identifies a majority of their stores
around the globe. Lrivate label brand
development also seems to be another
commonality.
What is distinctive, however, about the
characteristics identified above is the people
orientation of the worlds best retailers. In
every one of the worlds best retailers, there
have been leaders who inspired their
organisations through significant periods of
innovation and growth. hese individuals also
created or grew an organisational culture that
attracted talented individuals and motivated
them as managers and employees to be
entrepreneurial, innovative, adaptive and
opportunistic. In turn, these store
associates made customers their first
priority and offered them the products they
wanted, at the lowest prices, as conveniently
as possible and with gracious service. he
leaders, managers and associates of these
leading retailers also recognised their role as
corporate citizens in their surrounding
communities and contributed accordingly.
In other words, it doesnt matter what the
retailer sells or where they locate. Success
originates with individuals who motivate
others in the organisation to be innovative in
maKing customers and their community their
top priority.
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