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Samuel Walton: Retail Giant

Sam Walton founded Wal-Mart, growing it to over a thousand stores. He is a serial early-adopter whose commitment to innovations made them ubiquitous and his investors extremely rich.

Sam Walton

Short Biography

Samuel Walton was born in Oklahoma, in 1918, and grew up on the move in Missouri, during the great Depression, as his father worked at a series of sales jobs. Walton worked too, during his education, pausing to take a degree in Business at the University of Missouri at Columbia.

On leaving, he started working as a management trainee at JC Penney, where he also started learning the management skills that would help him grow his own business in the future. As for many young men of his age, the Second World War put the brakes on his career, when he served in the US Military Police. Returning to civilian life in 1945, he decided not to return to JC Penney, but to open a franchise Ben Franklin store in Arkansas, funded by a loan from his father-in-law.

This thrived, but he was unable to renew his lease, so opened a new one in a nearby town in 1950. Gradually, he bought more and grew his empire, using a light aircraft to get from one store to another and to scout possible new locations.

In 1962, he opened his first Wal-Mart store, on a new model he’d seen in Chicago – a Kmart, owned by competitor Sebastian Kresge. He had started his experiment with bulk retailing. Over the coming years, he experimented further in stock lines and layouts, and opened a second Wal-Mart in 1964. Then, in 1970, he raised $5 million in equity through a stock issue (at $16.50 per share), and opened six new stores and a distribution warehouse. By the time of his death, one of the original Wal-Mart shares had grown in value to $26,000 and the Wal-Mart empire was the biggest retailer in the US, with over a thousand stores.

Sam Walton stood down as CEO of Wal-Mart in 1988, to fight both leukaemia and bone marrow cancer; and finally died of it in 1992.

Five Retail Lessons from Sam Walton

1. The Personal Touch

Walton would get to know his employees (or Associates, as they are known) personally in the early days. He maintained this as long as he could, having gained a pilot’s licence so he could fly from store to store. The use of the term ‘Associate’ was a deliberate choice to create a sense of inclusion and what we would now call engagement. Indeed, he encouraged managers of new stores to take shares in the business to create a sense of their ownership. Walton practised, from his earliest days at JC Penney, a management style that can be called MBWA: Management by Walking About.

2. Rigorous Standards

In visiting stores, Walton set and expected strict quality standards. If he did not find them, he was sanguine about just shutting the store and not re-opening it until the management and staff could get it right.

3. Control your Supply Chain

There is a story about Walton that reminds me of one I recounted about Ingvar Kamprad (founder of Ikea). In the early days (his second Ben Franklin store), when a local competitor sold out of a product – women’s rayon underwear – instead of ordering himself a stock, he bought the distributor. In one move, he deprived his competitor of stock and assured his own supply chain. The money he raised in 1970 from a stock issue was used in part, not to expand his retail base as much as possible, but to fund a distribution centre. Like a good military general, Walton understood the criticality of his supply chain. He invested heavily in warehousing, logistics and, early on, in networking his stores and warehouses to one another.

4. Embrace the New

Less of an innovator and more of an early adopter, Walton frequently saw and rapidly embraced new ideas that would help him grow his business (Jim Collins’ Flywheel principle). I mentioned satellite networking of his stores, above, but other examples abound:  self-service retailing, discounting, and hypermarkets. Each step made him more successful.

5. Experimentation

Walton believed in achieving the best results he could, so he was constantly experimenting to test the effects of different layouts, promotions, and stock lines. Once again, the flywheel principle at work, but the salient lesson for me is test-evaluate-improve – then test something new.

If all this sounds a little familiar, take a look back at the blog on Ingvar Kamprad, which I posted just over a year ago. I cannot help feeling that these two retailers, born only eight years apart, are kindred spirits.

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Ingvar Kamprad: Resilience, Thrift and Buns

Ingvar Kamprad is not a familiar name… but his initials, and those of the farm and village where he grew up, are. Ingvar Kamprad grew upon  the family farm, Elmtaryd, near the  village of Agunnaryd. And in 1943, the company he started at the age of 17, which sold a random mixture of goods by local delivery and, later, by mail order, was called IKEA.

Ingvar Kamprad


The story of how Kamprad went from pens and picture frames moving around locally on a milk van, to one of the richest people on the planet is instructive: not just for entrepreneurs, but for anyone who manages a part of an organisation.

Quick Biography

Kamprad was born on the family farm in 1926, in the southern Swedish province of Småland. His first retail goods were matches, which he resold to his neighbours when he was five. He moved on to catching local fish and picking local lingonberries, and sending them by bus to his buyer. He founded IKEA in 1943 while working at a full time job, and it was only in 1946, when he completed his national service, that he saw the opportunity to move IKEA towards being solely a furniture retailer.

By the 1970s, IKEA had stores across Europe, and by the end of the century, it was in 30 countries, with a mailing list for its famous fat catalogue, of 100 million. Now retired and a tax exile in Switzerland, Kamprad eats modestly, flies economy, and haggles with market traders.

It would be wrong to ignore what Kamprad has described as “The Greatest Mistake of My Life” – his early association with Swedish pro-Nazi fascists. The extent of his involvement and the degree of his remorse is something for historians and Kamprad to consider. In 2001, IKEA opened for business in Israel.

Five Defining Ideas

In reading a story of Kamprad’s life, I have spotted five defining ideas that seem to me to have made all of the difference. None of them is exclusive to the retail industry, much less to the furniture trade. If only my father (a near contemporary of Kamprad’s and also in the furniture trade)… But then, we are who we are, and I wouldn’t swap for a moment.

Principle 1: Customer’s Shoes

IKEA is famous, among other things, for its cafes. On the first day of opening his first furniture warehouse, Kamprad promised every customer coffee and a bun. To get there, they would have to travel a long way, in harsh, cold weather conditions. When he opened the door on that morning, there were over 1,000 people patiently waiting.

Principle 2: Thrift

IKEA is also famous for self-assembly, self-service, and minimal packaging. Each of these is designed to reduce costs to IKEA and so to their customers. Kamprad was always, and still remains, conscious of every last Krona, Euro, Pound or Swiss Franc.

Principle 3: Resilience

In the 1950s, Kamprad’s competitors became jealous of IKEA’s growing success. They struck back with unsavoury tactics that would have crushed a less determined person. They pressured suppliers to not serve IKEA, and they got the company banned from trade fairs. Kamprad’s resilience and ingenuity turned these potentially fatal setbacks into triumphs: he started to design and build his own furniture, owning the whole supply chain, and he bought his own exhibition centres.

Principle 4: Brand Identity

It is easy to think of the distinctive blue and yellow colours and block capital font of the IKEA logo as its brand. Kamprad did not. He said that the product range was the company’s identity. And I think he was right. Whether it is the distinctive simplicity of the Billy bookcase or the cutesy accessories like the Spöka nightlight, we recognise IKEA products whenever we go visiting.

Principle 5: Innovation

IKEA has not stood still. Not only is their product range frequently refreshed and the showrooms re-dressed often, but IKEA has constantly innovated in the way it goes to market and delivers its services.


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