It’s the 1990s and Walmart’s replaced Kmart as America’s biggest retailer.
But now that it’s on top, its business practices are under fire. And for Target, that’s an opportunity to paint itself as the friendly alternative to the Bentonville juggernaut.
But to really break through, Target knows it must stand apart from its bigger opponent. And it’s about to find what it needs in the design districts of New York City.
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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Hey prime members, you can binge off or episodes of business wars, target verses, walmart, ad free on amazon, music, download. The app today.
December. Ninety ninety two Walmart head office, Benton ville arkansas, ceo, David glass, enters the company film studio, he's a stiff man with greying hair and thick sloping black eyebrows. It said his face into a permanent scowl, but
Today he wants to charm. He smiled and shake hands with the reporter from NBC television news show dateline. It's been eight months since war,
Lord founders, sam Walton, died in glass, has big boots to fill
walton, died a hero to millions of low income americans, his stores made
stretched budgets stretch further and they loved him for it. He was america's richest man,
but his rustic manner made him seem just like his customers. Glass lacks walter,
easy charm and more people are questioning Walmart friendly image. Now that it's become america's top retailer, so encouraged by walmart publicist
he's been sweet, talking the media and getting glowing tributes in return? He expects
they will be more of the same and it is
right up until the interview takes an unexpected turn. The reporter terms
the tv and video player by his side, videotape
What NBC uncovered in bangladesh is already loaded. I will show you something
this is a factory emanating from glass plan.
is it walmart, publicity, chief, don shingle, whose standing just off camera but shingle, isn't sure what to do glass,
fallen into a trap and seems unable to talk his way out of it.
Go considers intervening, but that would look terrible. So he holds back his glass
replies to my knowledge. We don't buy
From Annie
under that users, child labour in be
order, hands glass, a folder inside our photographs of dead children. Children who died from
Smoke inhalation during a fire at the bangladeshi factory that now produces walmart shirts glass
makes his head ass. He examines the photos. Children who work in this plan are locked in
until all hours of the night until they finish that day's production other tragic things than
all over the world
That's all you want to say that in general lurches forward,
I don't know what else would further the too late to stop glass replying shingle steps in where
any more questions put him in writing. Walmart team quickly turn out the lights and ruin the footage of glass storming off
embassies expos a airs just before christmas and people keep shopping at walmart anyway. But while the footage from
bangladesh doesn't hurt sales, it does leave stains on walmart image. It won't come out
eight months ago, sam Walton could have said shocks in all would have been forgotten, but he's gone now.
Walmart just another big corporation and targets about to exploit that to the max.
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From one
I am david brown, and this is business
On the last episode, Walmart conquered small town, america and russia
to the top of the retail rankings, while target channel disney's approached
serviced charm, the city suburbs. Now, after you,
staying out of each other's ter, the race to expand, is bringing them into conflict, but with walmart already three times bigger target needs of vulnerability to exploit and asked. This is episode too
the beast from Benton.
Early ninety ninety three, the walmart in cedar, rapids island
front of the store and elderly walmart greeter bins down to place a sticker of a yellow smiley face on a little girl's coat they go now now. Can I get a high five, no sure now? Okay, then bye, bye,
Well, as the little girl and her mom leave, the greeter waits for more incoming shoppers. Readers like him welcome shoppers at every walmart, but they're, not just there to lift spirits they're. Also a shoplifting deterrent seems they make people feel guilty about stealing. The greeter waves as a clean cut couple push a cart through the doors warning. Folks you come far today. The couple looked startled, then smile back, no not far, but that's a lie. This couple isn't local and they're not here to shop there, not even a couple. There, actually,
the target employees on reconnaissance, the greater smiles get for you have a great day, relieved that he was just being over friendly, the under
cover target. Do oh get to work
they roamed the aisles methodically seeking out every price comparison sign in store the man frowns, as he inspects a pack of baby wipes walmart signs
I am that this pact cost seventy five cents more target, even though
comparing items of different sizes,
even sell diaper reigns in this size. Just put it in the cart. Don't draw attention walmart been making inaccurate price comparisons in stores for months
at first target thought it was just a few isolated mistakes, but it keeps happening
Many of the comparisons aren't even like for like so now
its gathering intel poor counterstrike march nineteen. Ninety three walmart head office, bentonville
in his corner office, ceo david glass grits his teeth ass. He reads: targets latest newspaper rags.
headline reads this never
would have happened. If SAM Walton was alive glass,
turns to walmart publicity, chief, don shingle
Where are these adds? Runnin in six states
newspapers are also writing about the ad. So the reaches broader targets, also com
owing to the better business bureau, glass continues. Reading the end,
hails. Walton is a fierce but honest opponent. Then
it accuses Walmart current leadership of betraying his values, glasses, perma, scow, deepens.
targets, using walton image against walmart and for glass. That's personal walton was his power
and the first anniversary of his death is just too
away
is low and dirty. How dare
You sound like that can't go unanswered.
I won't ads in the same newspapers. Take this down as a jumping up point: shingle grabs his pen and takes notes. His glass dictates
for target to say we cheat is an affront
The all walmart associates, target
reminds us that it was only a year ago that we lost someone we loved very dearly. What's
stood for is alive and well, and clearly there
makes target nervous. I got that shingle nods.
but by the time walmart counter rats appear. Other rivals are joining the attack,
discount chain Meyer complains to michigan attorney general about walmart misleading price comparisons after the attorney
we'll threatens to sue Walmart settled quickly and promised change soon. After
A better business bureau backs target and gets walmart to stop gooding price comparison signs in stores, but Walmart got bigger things I it's. My glass wants to turbo charge, walmart growth and he's borrowing billion
to do. It he's ordered its new international division to go from nothing to sales of
billion dollars a year in just five years.
He also wants new walmart opening at home faster than ever.
finally in the northeastern state,
This is the only part of the continental usa that has as yet been saturated with big box, discount stores and there's big money there
north has the highest concentration of above average earners of any region in the? U s but walmart
bush, into yankee territory sparks
when he pushed September nineteen. Ninety four benton bill in the parking lot of walmart headquarters, Karel goodwin, a mother
eggs opens the trunk of a car and retrieves a wooden basket covered with a chequered dish. Tell she shut the trunk and looks at walmart, squat, red, brick, home office,
she's, fifteen hundred miles from her home and stir bridge massachusetts and about to do
with america's biggest retailer
and minutes later
winds in a room with walmart publicist don shingle. She removed
the dish towel covering the wooden basket inside there's a bottle of maple syrup, some candies, a cookie cutter and a few candles. These are gas from asked to walmart everything's maiden, stir bridge even the best
It shingle expected a more combative start from the woman leading the campaign to keep Walmart out of stir bridge. Well, thank you. It's very kind
of you to think of us and bring these gifts. Every story, these gifts or from will be at risk. If walmart opens in our town,
I don't think that's true! Stir bridge has locked
it gives stores, but very few places for general shopping. There's already.
walmart, eleven miles east of our town. Why invade our town too
we don't invade anywhere. We bring jobs and help people make ends meet. If starboard,
is to thrive. It cannot be a museum assure, but isn't it for the people of serbia to decide what happens in their town. Last month, the town voted six to one against your store.
shingle knows all about that vote
that was a non binding vote of seven hundred people. There are eight thousand people and stir bridge
those who voted against our stored. Dont represent every one in the town. Goodwin gets a book from her hand, bag
the covers a photograph of sam walton wearing a walmart baseball cap. You now,
on the way. Here I write
at sam Walton's book. He sounded like a good man. He was.
one thing, he wrote really stayed with me. Ah good one finds the passage she underlined if some community
whatever reason doesn't want us in there, we aren't you
a sitting going in and creating a fuss. You know, I think you ve sam Walton, was alive today, he'd be answer bridges.
Well, we'll have to disagree on that
but rest assured, I have heard your concerns and I will
reef, arcy, ceo david glass on our meeting goodwin stares at shingle you're, not going to stop
You like, I said I will brief. Mr glass, you have my word. Thank you again for the gifts they shake hands, but they both know despite isn't over and stir bridge.
Alone across the northeast. Local people are banding together to stop Walmart advance some false with
but others entangled retailer in red tape and losses. Walmart usually triumphs
but instead of storming into the northeast, it must now grown
find its way forward, and that gives target time too.
Gotcha.
April. Nineteen. Ninety six may
city iowa in a brand new
I get the size of three football field. The store man
your strolls, the aisles feeling proud hearst.
Where's the chain sports super target.
It's already ringing up big numbers at
This enormous superstore selves food, the manager, checks the red shopping, cart of a passing customer
inside the cart, bread and milk sit alongside more standard target, fair, like shirts and batteries. The manager smiles at the site that customers card is exactly what super targets are all about. On average
people shop at big box discount stores once a month, but visit supermarkets at least once a week, so too
gets using groceries to get people to visit more. The plan is they'll, come for the food and then by
clothes and other goods, and since there
much more money to be made from selling general items than groceries target can under cut supermarkets and still increase profits
Supermarkets also face higher labour costs because their unionized and targets, not the manager, enters the grocery section. It takes up around a third
store and sells everything a supermarket would, but the moment she passes the bakery com
She sees something but stop surrender tracks,
there's a bunch of men in suits the delhi counter and among them,
Familiar grumpy, looking guy ass, she got at the sight one of her team opera,
Do you still want me to help with the delivery? Hey you see that guy
you know who that is right. The employees squint the guy who's.
taking a lot of interest in the asian food counter,
I am not sure the on tv, its david glass, the employer, gives or a blank look. The boss of walmart
oh, oh hygiene shopping at target, he's not shopping! He's! Checking us out,
must be worried by what we're doing, but while Walmart
paying close attention to the new super targets. It's not worried yet and that,
cause Walmart started the superstore trend, walmart imported the idea from france and
and its first super centre. Nearly a decade ago now it's got two hundred fifty
per centres selling general goods and groceries and deliver
billions in annual sales.
eventually, once every walmart to become a super center. But while Walmart built super centres, target sat by it felt food was outside
expertise. Only now has it realised that to stay competitive it needs to sell food too, but there is one battleground.
targets, still got a shot at catching up with walmart the northeast win their it's got to prove that its cut above other,
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The.
december. Ninety. Ninety six manhattan in the offices of
the agency, kirshenbaum bond and partners targets,
dapper marketing, chief john Pellegrino stares at the advertisement. In front of him,
the only image is targets, bull's, eye logo or red dot, surrounded by circle below it are the words
If you know what this symbol means call this number pellegrino,
said the agency's creative director bill oberlander. It
and even mention target oberlander nods. Here's the thing
New yorkers are obsessed about being in the no and the people here
come from all over manual.
Oh target this add, will
then in the no and make those who don't know.
Target wanna know. Pella Green, isn't sure targets
to open a store in edison new jersey,
It wants to leverage that stores proximity to new york to launch its brand and the northeast and target can't afford to mess this walmart snort. These turn advances bogged down in battles with communities that
It is a corporate beast that hollows out downtowns pays poorly and blights the landscape. If target gets this launch ride
maybe it could convince yankee shoppers to see it as friend, not foam, but this cryptic
is well outside pellegrino comfort zone like every other.
discount chain targets adds usually trumpet low prices to pellegrino knowledge. No
count chains ever run a pure branding campaign before he looks at oberlander
We at least mentioned that the new stores and edison, absolutely not it's in new jersey
new yorkers that may as well be idaho. We have to sell,
says the new york area, grand opening pella green relent, fine, but if there's not five thousand,
people in that store on opening day. You guys are toast, but the campaign delivers within an hour to
thousand new yorkers call the number on the add yet
in store quickly becomes one of targets, top performers and the buzz about target spreads fast across the northeast, but targets still missing something
it's got disney inspired service wide
cluttered isles and customers that on average earned
thousand more year than walmart shoppers, but to really stand apart.
It needs to be more than a tidy or walmart it needs some
walmart and other discounters lack style. Nineteen. Ninety seven target,
headquarters minneapolis in the dining room targets executives or treating Michael graves to lunch. He says
sixty two year old architect and designer with thinning gray hair, his reza may include
disneyworld, hotels and one hundred,
woody dollar alessi t kettles, but his latest
It is to design the scaffolding for the washington monuments, restoration and since targets writing that checks for his scaffolding he's come to brief its executives on the project
a target vice president ron johnson scottish different project on his mind, Michael this might be a curveball, but
would you ever consider designing a collection forests? We ve been knocking
you're designed for fifteen years, suppose it
about time we went to the source thinking a collar
she, and that includes everything from telephones, the toilet, brushes, solid target prices, raves mouth curls into a hard to read smile
he knows K mart cells, Martha Stewart, homeward walmart stocks morning tee.
star, Cathy Lee giffords clothes and he's no celebrity, I'm flattered, but
doubt your customers know who I am
We don't want a celebrity. Our competitors do that and we don't want to do what they do.
We want to work with real designers to democratize. Good design. Graves sits forward, interesting,
the modernist and bauhaus movements, movement streamed, bringing great design the masses I do to Johnson leaned forward.
targets executives, one a new song to sing for decades discount stores.
Fought each other on price, but well. Marts buying power means the arkansas giant
always has the edge, so they
switch things up and start selling upscale products at everyday prices, but most elite
designers. Dont want to risk their credit by working with discount stores. Really you open a working with us
Not taste is no longer just for the elites stranding downward. So how would this work well
typically order, eighty thousand units of each product and the collection and order more of any eyed, and that sells your cut person.
it won't be huge. But given the volume of product we sell, the money would still be significant graves face brightens, but then he smiled
groups as something wrong. I have a confession:
I've never set foot in a target. Oh
kay. Well I'll arrange a tour.
Even use it to pick out what products you'd like to include in your collection about tat. Well
I I want to make a toaster
posters are the same boring boxes. I want a toaster
makes me smile at seven. Thirty, a m m madeleine
Tour would be perfect. I could put yellow posted so
anything I find ugly
I killed there aren't enough posted in the world for that target and grave.
Been months, finding ways to deliver his designs at rock bottom prices by using
cheap raw materials and manual
measuring methods
in january nineteen. Ninety nine targets michael graves-
collection goes on sale,
since bands three hundred items the report, toasters and whimsical alarm clock,
translucent ice buckets and stylish spatulas theirs.
A version of the stainless steel t kettle graves made for alessi, but instead of a hundred and forty dollars, this one costs thirty, nine. Ninety nine graves collection disrupts the discount
for years, discount stores have been seen as down market now:
organ selling, goods that are both cheap and sheikh still grace. Collection is no
home run, the early sales are mediocre. The targets not backing off its determined to break from the discount pack and
The graves has proved its, not a career killer to work with the discount store. Others
minors why it in
nineteen. Ninety nine target releases, a line of cosmetics created by make up farthest, sonya cash and begins
work on a sportswear line from fashion house massimo, then marketing.
John l, a green applies. The lessons learned from targets new york, add campaign.
proves the national tv add campaign that doesn't mentioned prices or products. Instead just
happy people living in a world built from target logos and soundtrack five, two o clock.
You mean getting sign
the times adds make everything click into place.
for forty years targets called itself the upscale discounter, but lack this stylish products and trendy image to back it up now it's got both target.
No longer a discounter is the home of cheap sheikh
It sales in stock cries sore for twenty
Here's targets been slipping ever further behind Walmart. Now it's keeping pace, but why
target switches to selling itself on style. Walmart keeps on rolling back prices.
Rising with walls.
Established as the low price tightened and target the sheik alternative.
gus number two discounter kmart loses out to both
and in january, two thousand to K mart troubles, finally drag it under attention. Kmart shoppers that discounting retailer is fighting for its life. These days in a tough world of low price competition, kmart filed for chapter eleven bankruptcy protection. This past week becoming the largest american retailer to seek protection from its creditors came, are famous for its blue light. Specials martha stewart and Jaclyn psmith brand lines could emerge from bankruptcy next year, but with many store is closed and many jobs lost that summer, as kmart shut stores in a desperate attempt to nurse itself back to financial help, target pulls ahead and becomes the country's second biggest discount chain
but targets leadership also knows that now that it's number to walmart will take its focus off kmart income for them. Next, raising kids can be one of the greatest rewards of
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summers.
thousand too, in a walmart in detroit to associate sir
putting clothes on display before the store opens. The clothes belong to walmart new fashion label. George Walmart british arm asda has been selling george clothes for years
how walmart hopes this english imports range of corporate casual apparel can counter targets new
our success in fashion. The female workers cuts open another box.
Pulls out an invitation. Leather jacket, this one's nice spread. Does it suit me fred, drugs.
guess. So am I wanted these? It's only eighteen. Ninety six, the rest of the george collection is just as purse friendly, their polyester pants suit
for forty six dollars. Thirty six dollar blazers and mock turtleneck spur under fifteen dollars, but when the doors open
george cell slowly clothes aren't the problem. It's who selling them walmart.
birds. Dont come for style. They come for cheap basics
but selling fashion is all about image and thanks to its roots
in the department store trade target knows just how to do it.
And in the summer of two thousand and three as george continues to struggle
get unleashes its biggest designer collaboration. Yet Isaac was right. Wait till you see these closer desire for target
shaped affordable. It's like fifth avenue, meets main street usa classic fresh clothes to make women all across america. It's a big country, you're going to need some great shoes. I love you and gorgeous
seeing her easy solution. So does it happen?
Not your average isaac is rife. Retarget luxury, every woman, everyone misery
he's, sway. Jackets pink quarter
blazers and silver trench coat cell fast in manhattan target opens a pop up store at thirty rockefeller plaza and people line up around the block. Two by its misery
nationwide. The collection add three hundred million dollars a year to targets top line and cement its rapid style destination. By now, people are dumping gap for tar
and affluent shoppers who wouldn't be seen dead in walmart are seeking out the bullseye logo gets a potent competitive advantage to walmart, usually beats target on price, but it's a difference that can be measured in sense, but in fashion the gulf between the two brands.
is a gaping chasm and as target reap the rewards from selling high fashion at low prices. Walmart,
ceo lee Scott and his lieutenants do the unthinkable they start
question, their devotion to low prices november, twenty sixth, two thousand for six forty. I am at least
Georgia in a walmart parking lot Michael, do helps a customer load, a flat screen television and will minivan dukes the president of
march doors, but today's black friday, the day after thanksgiving and
means all hands on deck black friday,
the retail superbowl is the biggest share.
Being day of the year, and it sets the tone for the
higher holiday season. The customer gives duke thumbs up Thanks man. I got it from here. A sure thing have a good day. Do checks is blackberry, while he's been helping, shoppers
it's been buzzing nonstop with updates from Walmart stores, nation wide, and the news isn't good
Those are tracking behind last year's black rotting in bismarck north dakota,
just one hundred people lined up at walmart before it open
last year. That line was several hundred people long duke suspected as much.
The atlanta store he's at is busy, but it's not that busy. He heads to his car,
it's time to see if it's just walmart that suffering
Ten minutes later due cruises, the twilight streets of atlanta checking out the competition
seers and coals. Look busy, there's a big.
At best by two heads for target lots overflowing with people pushing red cards full of organs, he's got instinct was right, Walmart just
fumbled black friday, and he knows why
Last year, Walmart declared a take no prisoners, price war on toy retailers. What followed was a bloodbath
get rush to slash its toy prices, toy
retailer tabled. Ef Schwartz went bust by early december. Cavy toys lost one hundred million dollars and filed for bankruptcy and toys.
ross, limped away with its profits crushed,
but while Walmart scored a decisive business victory its bludgeon,
Toy stores reaffirmed its image as the beast from benton bill. So this year one
decided to win back some love by playing nice instead of slashing
ices, until its rivals, tap out it pulled its punches now, the competition is cleaning up as walmart customers go elsewhere for big,
savings and dupe knows if walmart doesn't fix this quickly. This holiday season is going to be wiped out.
The day after black friday, two thousand for walmart headquarters, benbow
in the auditorium, walmart chubby sheet, ceo lee Scott browse the stage.
Yesterday was a blow out our ourselves, this
mother up just point, seven percent from last year targets up more than three percent
executives spilling the room. Agree is a look of determination on their faces
and not used to losing made dont like how it feels
They now know they should have discounted hard walmart Sploosh collar customers are getting hammered by a shaky economy at high gas price,
but instead of offering them relief with rock bottom prices, Walmart let the company
titian. Do it instead, Scott stops prowling the stage gives his orders
I want to aggressive role backs collier. Suppliers makes
They can keep our shelves stocking then get those prices down executives, grabbed their blackberries and get to work. One executor
Calls the ceo of severally branded apparel hairs in question if we are genuinely separates by twenty percent.
Can you deliver enough inventory? There's a customer rush elsewhere do cuddled with a toy buyers to identify products there
It started shoppers stampede. What's
hottest this year?
new elmo's saying. Why am cia
and we're gonna sell elmo's cheaper than any one else in the country ass,
esther prices: twenty nine, ninety nine, where it twenty six. Seventy eight hello,
you want to go well below twenty dollars making. Lastly, I want:
bringing people into the stores and price alone, no other retailer will dare matches the marked downs. Don't stop coming day after day week after week, all the way to christmas walmart,
rolls back prices again and again to make up lost ground and, as the prices fall, sales climb law
mark ends december with sails up three percent from the year before
so remarkable, rebound from its dismal november,
but it still not good enough
the real winner of the two thousand for a holiday season is target.
Its december sales are up more than five percent from the year before, but walmart
won't make the same mistake twice and next year, it'll be seeking revenge on the next episode. Walmart opens a war room target marches north and black friday as digital.
From wondering this is episode to of target verses, walmart or business wars. A quick
note about recreations. You ve been hearing in most cases. We can't know exactly what was said. Those scenes
organisations, but their based on historical research.
Like to read more about targets. History. We recommend the target story by bill. Chasse dame
I'm your hosts david brown, Tristan donovan of yellow aunt media read this story.
Karen low is our senior producer and editor edited in
lose by Emily frost, sound designed by
I'll randal voice.
By michel, philippine
Our senior managing producer is tat. You think, then our managing producer is mad. Gatt
producer is dave shelling. Our executive producers are jenny, lauer, batman and martial lily for wondering. Support for business wars comes from capital, one with
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Transcript generated on 2023-06-08.