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BY MIKE TROY
FAYETTEVILLE, Ark. — As election-year politics begin to heat up, Wal-Mart is intent on playing a more prominent role in shaping the nation’s public policy regarding health care and demonstrating how the company’s size makes it uniquely qualified to have an impact.
During the company’s annual meeting of shareholders held earlier this month, and an all-day media conference that preceded it, senior executives repeatedly spoke of Wal-Mart’s mission to save customers money so they can live better. And it was in that context that Wal-Mart chairman Rob Walton, president and chief executive officer Lee Scott and president of the health and wellness division Dr. John Agwunobi, all made reference to Wal-Mart’s generic drug pricing initiatives.
“We are extremely proud of the work we are doing in pharmacy,” Agwunobi said as he stood in front of the pharmacy at a Wal-Mart supercenter here.
To a large extent, Wal-Mart used the event and to cast itself as the savior of hard-working American families bearing the brunt of rising energy prices and food inflation. According to Scott, Wal-Mart’s prices on everyday needs help customers cope with high gas prices. However, it is
Wal-Mart’s efforts in the ident and the next world of generic drugs Congress,” Scott said. “We where Scott asserted the believe we can be an effec-company is making the tivepartner.” biggest difference. Wal-Mart’s ability to get Wal-Mart executives say things done has improved it has saved customers more during the past year as the than $1.1 billion since the $4 it has galvanized around generic drug program went the philosophy of “save into effect in fall 2006. money, live better.” As “By saving people money Scott said, the expression is on their prescription drugs, not simply a marketing we have changed the phar- slogan. And even though it maceutical industry and the Wal-Mart health and wellness division was adopted just last fall delivery of health care forev- president John Agwunobi said the chain by Wal-Mart’s new adver-er,” Scott said. “We have “is extremely proud of what we’ve been tising agency, company helped millions of people doing in pharmacy.” chairman Rob Walton live better, healthier and fuller lives. And sought to put its use in historical context. we have begun to play a meaningful role Referring to a presentation in 1992 when inthe healthcare debate.” his father, and Wal-Mart founder, Sam
It is a role likely to grow larger, as Wal- Walton received the Presidential Medal of Mart relies on pricing initiatives as a Freedom from George H. W. Bush, he said, means to grow its business, while simulta- “Dad said, ‘if we could continue to work neously positioning itself as an agent of together, we’d give the world an opportu-change in the healthcare system. While nity to see what it was like to save and to that assertion can be disputed by critics, it have a better life.’”
provides Wal-Mart with a solid story to Now, Walton and Scott contend Wal-share with lawmakers, who, up until Mart can use its size to be a force for posi-recently, saw Wal-Mart in a negative light. tive change in the world. One of those
“Regardless of who wins the election in changes is sure to be the development of November, and what party they are from, additional programs that impact the costs we stand ready to work with the next pres- of healthcare products and services.
BY MICHAEL JOHNSEN
NEW YORK — Globalization. Rising energy costs. Increased dependence on technology. Growing channel diversification. And a more informed, and so ever more demanding, consumer.
These were just a handful of reasons 15 leading retailers and manufacturing companies from across the globe banded together a couple of years ago to look ahead—then, 10 years into the future—to examine how certain immutable forces will reshape the way that buyers and sellers will conduct business tomorrow. Phase one of the project, aptly named, “2016 Future Value Chain,” recently culminated with the release of an important white paper that identified four key objectives retailer and supplier partners will need to meet to better satisfy the consumer and drive conjunctive growth.
Borne out of the work of the Global Commerce Initiative, key findings of the report, “GCI: New Ways of Working Together,” included:
• Long-term planning: Think in terms of three-year to five-year increments ver-
sus one year at a time.
“If you’re really going to develop collaborative business plans that will meet the needs of the shopper, then this annual business-planning horizon is probably insufficient,” noted Jim Flannery, director of customer development at Procter & Gamble, an integral member of the global initiative. Flannery is a GCI group leader.
That doesn’t mean retailers and suppliers shouldn’t plan tactically on an annual basis, for example, how to best optimize a hot new kid’s movie licensing initiative in time with the Halloween selling season, how to set the cough/cold/allergy planogram to best capitalize on seasonal trends.
Long-term planning is a little more in-depth, and is strategic in nature—not tactical, Flannery explained. So, for instance, staying with the cough-cold example, what are the best adjacencies that really help grow the total market basket? How close should the set be to the pharmacist? Or, in the case of a pharmacy that has a retail clinic, how close should cough-cold be to the nurse practitioner? And what is the role of that healthcare professional as it relates to that category?
• Common goals/shared data: Play by the same numbers for the same objective.
Critical to longer-term planning is a common language between the two partners. It doesn’t necessarily mean mandating that both sides are utilizing the same raw data from the same syndicator—be it Nielsen or Information Resources Inc. What it does mean is parsing the data in a similar fashion, for instance, placing a greater emphasis on unit drivers versus dollar profit. Also important is to come to an agreement as to what defines success.
A key current focus of GS1, a global organization leading the development and implementation of global standards across industry sectors, is a project called “Trading Partners Performance Measures,” Flannery explained. “They’re trying to create standard definitions for performance measures,” he said, such as, making sure that all retailers and suppliers are using the same metrics to calculate such measures as line fill.
• Trust: If retailers and suppliers are going to plan three and five years out, that means they must have the confidence that
CONTINUED ON PAGE 19
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