When Walmart arrived in Germany in the late 1990s, it brought the world’s biggest retail machine and a very American idea of good service: warm greetings at the door, smiling staff and a helper at the checkout ready to pack your shopping for you.
It was meant kindly, but German shoppers had never asked for bag-packers, and many quietly suspected that all this extra attention would simply end up on their bill. The packers were moved on. In 2006, after about nine years of trying, Walmart sold its 85 German stores and took a loss of around 1 billion dollars.
Tough discount rivals and strict regulators played their part too, but the bags have stayed with me as the clearest picture of what went wrong.
Nobody behaved badly.
What strikes me most is that nobody behaved badly. Walmart was trying to be generous. It simply never stopped to ask what generosity looks like to the people on the other side of the till.
The lesson.
The lesson is simple, and it is expensive when it is missed. Knowing the cultural landscape is often the difference between a business that succeeds and one that fails. Do your homework. A modest investment in research can protect you from a multimillion, or even a billion-dollar, loss later, and getting it wrong has already cost firms more than they ever budgeted for.
Read more about doing business in the Middle East.
Sources.
- The Guardian, “Wal-Mart pulls out of Germany”, 28 July 2006.
- The Irish Times, “Wal-Mart learns meaning of low prices in Germany”, 31 July 2006.
- Photo by Enkhjin photography on Unsplash, used under the Unsplash licence.