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On Wal-Mart

10:54 AM, Feb 9, 2009 • By JONATHAN V. LAST
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Over the weekend the New York Post ran a long piece by Charles Platt about working at Wal-Mart. Platt, a former staffer at Wired, took an entry level job at Wal-Mart in an attempt to see what the company looks like from the inside. His account is quite interesting, and worth the read. Some tidbits:

* "In fact almost all the rules devolved to the sacred principle of never, ever offending a customer - or "guest," in Wal-Mart terminology. The reason was clearly articulated. On average, anyone walking into Wal-Mart is likely to spend more than $200,000 at the store during the rest of his life. Therefore, any clueless employee who alienates that customer will cost the store around a quarter-million dollars."

* There is a Wal-Mart "pledge" that employees make: "If a customer comes within 10 feet of me, I'm going to look him in the eye, smile and greet him."

* Wal-Mart's data system is incredibly robust: "The Telxon, pronounced 'Telzon,' a hand-held bar-code scanner with a wireless connection to the store's computer. When pointed at any product, the Telxon would reveal astonishing amounts of information: the quantity that should be on the shelf, the availability from the nearest warehouse, the retail price, and (most amazing of all) the markup."

* And it turns out that every single employee has the power to order merchandise if they see excess demand for a product that the store doesn't have enough of.

All fascinating stuff. Platt's piece is largely favorable to Wal-Mart. Those interested in a more critical look at the company (which should be everyone; Wal-Mart effects everyone in America, even if you don't shop there), I'd recommend Charles Fishman's 2006 The Wal-Mart Effect. Fishman is not an anti-Wal-Mart partisan, but he is fascinated by how the company's enormous buying power--in economic terms, "monopsony"--sometimes creates massive market distortions.

Wal-Mart is likely to grow in power in the coming years. As the recession progresses, giant low-end merchants are likely to flourish (as Wal-Mart and McDonald's have done) while their higher-end competitors suffer or die.