The C-Suite Secret to Success for Retailers Like Walmart and Dillard’s

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Walmart just turned in another quarter of solid results, reporting comparable sales growth of 3.8% for its digital channels and stores operating at least 12 months. Founded in the 1960s in northern Arkansas by Sam Walton, the company was long looked down upon by many competitors in the retail industry. Today, it is not just the world’s largest retailer but also gaining market share among higher-income households.

Meanwhile, competitors like Macy’s, Target, Walgreens, Best Buy, and the recently departed Bed Bath & Beyond have struggled with e-commerce competition, management issues and declining comps, among other problems.

Was Walmart just lucky to be in the right place at the right time with the right merchandise when the pandemic hit? It helped, but the real secret to the company’s success can be found in the roster of its leadership and long-term viewpoint.

According to Bloomberg, the top eight Walmart stockholders are heirs of the founder, two of whom still serve on the board of directors.

Retailing was traditionally a family business.

Founder families of once-mighty marquee merchants–think Sears, Marshal Field’s, Gimbels, Kaufmann’s, Neiman Marcus, Bonwit Teller–were the sort of executives you would not be surprised to find wandering the selling floor, talking and listening to actual customers. Once those progenitors shuffled off or sold out, their businesses lost something that couldn’t be duplicated–owners and executives who had the same kind of “ownership” mentality.

You don’t have to look too far to find other examples.

Department store chain Dillard’s is another retailer founded in Arkansas (1938). The company just posted quarterly earnings that beat Wall Street estimates by a wide 18% margin. Two of the founders heirs own nearly 80% of the company shares, and a third, William Dillard II, has been the CEO since 1998.

Looking to another industry vertical near and dear to my heart…Technology…you’ll find a similar trend.

Microsoft, the high-tech company that made Bill Gates a multi-billionaire celebrity, has been regularly beating Wall Street’s revenue and earnings estimates and its stock is just shy of its recent all-time high. Although Gates and former CEO Steve Ballmer are no longer active in the business, they together own about 5.5% of the company’s stock. You can bet they have been paying attention to how the business has been run since they retired.

The corporate value of founders and families is significant, a fact that probably had a lot to do with why the Nordstrom family is contemplating taking that company private.

Its flagship stores are not performing great but its new fleet of Nordstrom Rack outlets are growing and profitable. Were it not for the family’s interest, the company might be in the same boat as Macy’s, currently the subject of speculation about a buy-out or liquidation by vulture capitalists.

Starbucks–which created today’s coffee culture–flourished under Howard Schultz, who took a coffee bean store in Seattle and turned it into an international juggernaut. Schultz stepped down in 2000. By 2007, the company was struggling and Schultz returned, growing the company’s market share and then retired for a second time a decade later. Then, struggling again, Schultz returned for a third time as interim CEO in 2021.

The point is that people who are personally invested and have an “ownership” mentality, not short-term investors, are the secret to success in retailing (and I suspect all other industries).

Jeff Bezos is still a major stockholder in Amazon, and you can be sure that he’s paying close attention to how that company is being run –not just for short term.


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retail technologies  Retail Planning  retail success  Walmart

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