Founder of Walmart
Built the world's largest retailer by opening in the towns everyone else thought were too small.
Photograph: Photo credit: George Bush Presidential Library and Museum · Public domain · Wikimedia Commons
Walton ran a variety store franchise before opening the first Walmart in 1962 in small-town Arkansas. The conventional wisdom was that discount retailing needed large populations; he went where competitors were not and had those towns to himself.
The second move was logistics. He built distribution centres and then put stores in a ring around them, so the supply chain was short and the cost of delivery low. Walmart became, in effect, a distribution company that happened to have shops attached.
Rather than running promotions, he priced low permanently. That removes the cost and chaos of constant promotion, smooths demand so the supply chain can be planned, and trains customers not to wait for a sale.
He was also relentless about visiting stores and copying competitors openly, which he wrote about without embarrassment.
Small towns were unattractive to everyone else, which is exactly why they were available. For a small business the equivalent is the segment, geography or service everyone finds too fiddly to bother with.
Nothing in the shops was unique. The advantage was in getting goods there more cheaply than anyone else, which customers never saw and competitors could not easily copy.
Permanent low pricing removed cost and complexity and built trust. Businesses that discount repeatedly teach customers to never pay full price, which is very hard to undo.
Walmart has faced sustained and serious criticism over wages, working conditions, resistance to unionisation, and the effect of its stores on the independent retailers in the towns it entered — the same small towns that were the original opportunity.
The lesson about low costs is real. So is the fact that some of those costs were pushed onto staff and onto the communities the model displaced, and any honest reading has to hold both.