Is Wal-Mart’s “Woman-Owned” Label Visionary or Just a Circus?

In September 2011, Wal-Mart announced a plan to spend $20B with woman-owned businesses by 2016. More recently, they expanded their Women’s Economic Empowerment program to include a ‘women-owned’ labeling program. Products that meet company ownership requirements will start appearing on Wal-Mart shelves this September¹. Qualified companies can apply to be a part of the program through WBENC and WEConnect International.

Despite the company’s apparent good intentions, the program has not been warmly received by all, including some critics who feel calling additional attention to these products simply because of female company ownership does little to advance equality. As one commenter posted in response to a BusinessWeek article on the program, “The path to gender equality does not involve stickers pointing out that a product has been made by a female entrepreneur.”²

Does the Wal-Mart women-owned label program have a chance at success? I suppose it depends on how you define success. If success is higher sales, Wal-Mart wins. If success is a better relationship with female consumers, Wal-Mart wins. Believe it or not, if the whole program continues to be decried as sexist, Wal-Mart wins. The likelihood is they will be able to claim success from all three.

In some ways, the louder their critics shout, the better for Wal-Mart. The technique of leveraging critical press to one’s advantage parallels one perfected by renowned showman, circus owner, and publicity hound PT Barnum. “To boost ticket sales, Barnum took a counterintuitive approach. He would send a scathing, anonymous letter to the editor of the newspaper where she was being exhibited that would question her authenticity. This, in turn, would generate controversy and even more ticket sales.”³ The end result is that awareness increases with both negative and positive reactions.

Wal-Mart has always been adept at protecting and repairing their often criticized brand. When they announced their original $20B women-owned spending initiative in 2011 it was only three months after the Supreme Court dismissed a gender bias case filed on behalf of all of their female employees. At the time, Brian Sozzi, an analyst at Wall Street Strategies in New York, commented, “The Wal-Mart public-relations machine is spinning overtime on this.”⁴ Without that suit, Wal-Mart might have never launched their Women’s Economic Empowerment program in the first place. They were working hard to improve their image with women even while they were fighting the suit.

We shouldn’t consider the program penance, however. Wal-Mart is positioned to profit handsomely. They have done their homework on the impact the program will have on female consumers. AS MiKaela Wardlaw Lemmon, senior director of Women's Economic Empowerment at Walmart, said in a company-released statement "In fact, we recently conducted a survey that found 90 percent of female customers in the U.S. would go out of their way to purchase products from women, believing they would offer higher quality."⁵

Female consumers are an important consumer segment, no matter what your business model. As AT Kearney wrote in a recently published article,‘Rise of the Female Economy in B2B,’ “Catering for women is nothing new. Companies have long known that women are responsible for the majority of daily household purchasing decisions. Increasingly, they are also decision-makers in major one-off family purchases (such as cars), and their participation in the workforce has given them greater wealth and higher disposable income. As a result, consumer-oriented companies tailor their sales approaches accordingly.”⁶

Or in Wal-Mart’s case, tailor their procurement and sales approaches accordingly and in strategic unison. Just as the woman-owned label program doesn’t communicate anything specific about product quality, it also doesn’t give any indication of fair-trade profit margins for the women-owned businesses in the program. Being a Wal-Mart supplier has long been known to be a mixed bag, er, jar… at least in the case of Vlasic Pickles. The ‘sad case of Vlasic Pickles’, summarized by Jon Hansen in a July 2007 blog post, started with a celebrated contract win at Wal-Mart and ended with Vlasic fighting to survive on razor thin margins and expected annual price decreases.⁷

Wal-Mart sees the opportunity on both sides of this issue. They can generate some positive gender equality buzz for themselves while not having to sacrifice their margins. But just as PT Barnum sewed a fish tail onto a monkey and publicized it as the Fejee Mermaid, sometimes a feature oddity is just a dead monkey displayed under the right lighting and banners.

So buy, don’t buy. Criticize, don’t criticize. Sign up for the program, or boycott it as sexist. It is hard to see how Wal-Mart loses either way.

Notes

1. Bethany Alcock, "Walmart to Launch New 'Woman Owned' Labels," Saltsha, Accessed July 1, 2014.

2. Patrick Clark, "Coming Soon to Walmart: A New Way to Find Products from Women Entrepreneurs," BusinessWeek.com, June 26, 2014.

3. John Burgeson, "P.T. Barnum: Master of advertising and promotion," ctpost.com, July 4, 2010.

4. Ashley Lutz and Matthew Boyle, "Wal-Mart Announces Multibillion Dollar Women’s Initiative," Bloomberg.com, September 14, 2011.

5. Lauren O'Neil, "Wal-Mart to promote women-owned businesses with new product labels," CBCNews, June 30, 2014.

6. "The Rise of the Female Economy in B2B," AT Kearney, Accessed July 1, 2014.

7. Jon Hansen, "Public Sector Procurement and the Walmart Effect," Procurement Insights, July 9, 2007.