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It will not be long, according to Julie Lyle, Wal-Mart’s vice president of International marketing, before the company’s revenue outside the US is greater than its volume in the US. Five to seven years, she estimates. Which suggests that Wal-Mart’s rate of international growth will accelerate enormously, considering that this year its non-US revenue is between $35 billion and $38 billion, compared to the approximately $180 billion in sales generated by Wal-Mart in the US.

Which also suggests that Julie Lyle is in a great job at a great time.

We are in Portland, Oregon, attending Portland State University’s annual “Connections” conference, sponsored by the school’s Food Industry Leadership Center (FILC). (Actually, we’re doing more than attending. We’re privileged to have been asked by FILC to serve as master of ceremonies for today’s events.)

Monday night, Lyle gave an engaging presentation looking at Wal-Mart’s global strategy and intentions. Having only been with the company a year, Lyle noted that she’s still getting used to certain customs. “This is the first speaking engagement I’ve had in nine months that didn’t begin with a cheer,” she joked.

In fact, the cheer that is so emblematic of the Wal-Mart culture illustrates vividly the kinds of challenges that the company’s global strategy presents. “Fewer than 15 percent of the company’s employees were even with the organization when Sam Walton died,” she said, and on the international stage, this means having the communicate the essence of the company’s values and goals while paying close attention to what “the nuances of a word or phrase mean to different people.” Lyle pointed out that Wal-Mart’s international division consists of more than 1,200 stores, representing 11 countries and cultures, eight primary languages, 13 time zones, operating in both Communist and Free Enterprise systems and using 11 different store formats. Even for Wal-Mart, according to Lyle, communicating and achieving brand consistency across the board is an enormous challenge.

Some quick notes from Lyle’s speech:

  • “Passion” was a word she came back to again and again, stressing that throughout its global system, Wal-Mart’s associates need to have a “passion about what you sell and how you sell it.”

  • Lyle emphasized that while Wal-Mart is a highly centralized company, it works hard to empower people in the field to make local decisions that can have a dramatic effect on the countries in which they operate.

    She used as one example the occurrence of an enormous cucumber surplus in China last spring, occurring because farmers there had an enormous harvest of cucumbers that they couldn’t sell, couldn’t get to market, and that was threatening to bankrupt many of them. (Some families actually committed suicide because of the shame that the surplus brought on them, she noted – a vivid example of how different some cultures are from our own.) Wal-Mart staffers saw an article about the surplus on March 19, and by 11 a.m. on March 20, Wal-Mart had gotten people into the fields, arranged to have more than 3,000 pounds of cucumbers shipped to its Chinese stores, where they were put on special.

    Another example of local independence was when there recently were terrible floods in Germany, and local personnel opened up their stores to feed and even house people who could not return to their homes. “At one point we housed 4,700 people inside our stores,” she said.

  • A decision about how far Wal-Mart will go with its Seiyu investment in Japan could be coming in as soon as 90 days, Lyle said. Wal-Mart currently owns less than 10 percent of the Japanese supermarket retailer, but has the option of expanding its ownership, which would bring another 411 stores under the Wal-Mart umbrella. (A quick, highly unscientific poll of people in the audience suggested that we all drew the same inference from Lyle’s comments, that Wal-Mart will pull the trigger on broader Seiyu ownership, and will do it soon.)

    If the company does move to takeover most or all of Seiyu, Lyle said, it creates enormous logistical challenges -- Seiyu’s systems don’t match Wal-Mart’s, they speak a different language, the store formats are different, and the policies and culture are different. “We’ve already spent more on customer research in Japan than we did on our initial investment in Seiyu,” she said.

In the midst of all this change and growth, Lyle said, it is critical for Wal-Mart to remain true to its core values and sense of integrity. “If we don’t build on what Sam Walton created,” she said, “it’ll go away.”
KC's View:
We’ve seen a number of Wal-Mart executives give presentations over the past couple of years, and we have a memo for Bentonville:

Send Julie Lyle everywhere.

She’s smart. She’s funny. Because she’s relatively new to the company, she has just enough distance to put a human face on the Bentonville behemoth, making the company seem far less monolithic than it sometimes appears to be. Lyle is a terrific ambassador for the company, because you can’t help but like her. (And there probably were a number of retailers in the audience who think of Wal-Mart as some combination of Satan and Darth Vader, so putting an attractive, likeable person out in public is a very smart idea.)

Lyle was particularly funny when she talked about some of the cultural differences that set Bentonville apart from so many other companies. She said that executives with the company still have to share rooms when they travel domestically, and she still has to check the phone bills and expense reports of everyone who reports to her to make sure that costs are being contained. And her best moment was when she spoke about Wal-Mart’s high fashion business in some countries, then stepped away from the podium to show off the extremely attractive black suit she was wearing. “It’s a $68 suit that comes from the George line in the UK,” she said -- and the impromptu fashion show spoke volumes about Wal-Mart’s power.

One other note. Lyle said something that struck a chord with us, that customers throughout the globe expect that its stores will “have everything I want, when I want it, at a reasonable value, easy to find, and treat me in a way that is reasonably friendly”. That, she said, is the central message of the Wal-Mart brand.

There were two parts of these comments that are worth pointing out.

Readers of MNB know that at least a couple of times a week, we note that any retailer that wants to survive has to act on the premise that customers want the products they want, where they want them, when they want them, how they want them, and at the price they want to pay.

Sound familiar? (We’re not suggesting that Lyle stole our copy. Just that Wal-Mart is doing what we’ve been preaching.)

The other comment was about Wal-Mart being a powerful brand. There was much debate a couple of months ago on MNB among members of our community about whether or not Wal-Mart is a brand. Clearly, Wal-Mart thinks of itself that way, not just as a vehicle for other companies’ brands.

And if Wal-Mart’s competition doesn’t think of themselves the same way, and acting on that impulse, then we don’t think that long-term they will survive the battles against Wal-Mart.

And it won’t be Wal-Mart’s fault.

More exclusive MNB news and commentary tomorrow from Portland and the FILC’s “Connections 2002” conference…