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Retail Politics Makes Strange Bedfellows

Friday August 15, 2008
“Retail Politics” is the term that describes the hand-shaking, baby-kissing strategy that politicians use to make a personal connection with voters and “buy” their loyalty. This political season Wal-Mart put a 20th century spin on the old-fashioned term when it brought politics onto its retail sales floor.

Reportedly, Wal-Mart store managers and department heads were forced to attend mandatory meetings where they were warned that a vote for Obama meant a vote for unionization. A vote for unionization, of course, was a vote for increased labor costs and fewer jobs. Vote for the democrats and risk losing your job? It seems like an unspoken mathematical deduction that Wal-Mart wanted its managers to make.

While Wal-Mart has denied they are attempting to tell their employees how to vote, it’s easy to see how the average Wal-Mart employee who was corralled into the involuntary political rally might have felt a little bit pressured. Certainly any undecided Wal-Mart voter now has a strong compelling reason to land on the Republican side of the fence. With all other things being equal, “because my employer says so” is a pretty strong influence.

The issue at stake is the Employee Free Choice Act, which is being labeled as the root of all retail industry evil by many retailers big and small. Just because you make it easier for employees to unionize, though, doesn’t automatically mean that they will want to. Nowhere in American labor history can I find an example of unions successfully organizing in a retail organization where employee satisfaction and company loyalty were high. Since Wal-Mart currently has more than 75 class action lawsuits in 41 states filed against it relating to wage and employee practice issues, though, it is obvious why giving unions easier access to its employees would be a cause for concern.

Wal-Mart’s senior officers are not the only ones setting up their tents in the Republican camp this election year. Public opinion pollster Zogby International has concluded that Wal-Mart shoppers are also buying what the McCain campaign is selling. By asking people to name both their favorite presidential candidate and their favorite retail store, it was discovered that a majority of loyal Wal-Mart shoppers were also loyal Republican voters.

Political-minded consumers might want to consider as they stroll around Wal-Mart, Sears, and Kohl’s that they are most likely rubbing elbows and bumping carts with shoppers who will be voting Republican this fall. Also according to Zogby, to shop Costco, Macy’s and Target is to shop where the Democrats roam. If the new “retail politics” involves using paycheck pressure to influence votes, then perhaps politically-minded consumers will exert their own political pressure by voting with their spending dollars for the retailers who share their own political opinions.

Along with religion, sports, medicine, science and ethics, perhaps “retailing” should be added to the list of things with which politics just doesn't mix.

The American Dream is Still On Target

Thursday August 7, 2008

The American dream is alive and well at Target. While companies like Coca Cola have spent billions to fabricate an image of Americana for themselves, Target authentically embodies the American dream in its new CEO, Gregg Steinhafel.

Retail employees everywhere can get inspired by the story of a man who graduated from college, got an entry-level merchandising job, worked his way through the ranks, and 29 years later assumed the top position of the company where he’s spent his entire career. It is the classic story of anything’s possible, hard work is rewarded, and persistence pays off. Steinhafel represents the essence of the American opportunity.

In his 29 years at Target, Steinhafel has held just about every position that has ever existed in a retail organization. He spent 15 years in merchandising roles, and it was 20 years before he was named president. Steinhafel’s predecessor, Bob Ulrich, also worked in the company for 20 years before taking the leadership reins. This is a definite demonstration of what Target values in its leadership team-- stability, loyalty, and a depth of understanding that comes only with experience

It seems that their slow and steady executive grooming strategy pays off well for both the corporation and the CEO. Target’s sales and store presence tripled under the Ulrich’s leadership, and its net earnings increased nearly nine-fold. More valuable than monetary earnings, Target was named by Fortune magazine this year as the 11th most admired company in America. That is a reputation that was not bought. It was earned.

Target has what it calls a “Community Responsibility” policy. Many retail organizations claim to have values that they believe will boost their image in the eyes of financial analysts, but Target actually backs up its claims in a tangible and measurable way. Target’s parent company, Dayton Hudson, has contributed 5% of its pretax profits to charitable and community organizations since 1946. Target has participated in this 5% giving practice since it was founded in 1962. Although Dayton Hudson doesn’t advertise the total amount of contributions they’ve made in their 62-year history of giving, since their donations will be about $150 million just this year, it’s safe to say the total calculation is mind-boggling. At a time when the retail industry is struggling, Target has not reallocated its charitable contributions in order to pad its bottom line.

Target, in a word, is grounded. It is rooted in its promise “to provide consistent growth plus a long-term plan to sustain our success.” If there are any short-term quarterly return strategies employed at the expense of the customer, they are imperceptible. Instead of living from quarter to quarter, Target is focusing on building for the future. It’s a shining example of what corporate American can be. Target is, in another word, inspiring.

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