DSN Retailing Today: There's plenty more boom to come

Those who do business with Wal-Mart and live in Northwest Arkansas know well how the area they call home has been transformed during the past decade. The economic development that has taken place in the region and in Bentonville is miraculous. The chance that those who have been part of the process will ever see anything like it again in their lifetime is very remote. After all, what are the odds that another small company operating from the obscurity of a little town in an out-of-the-way place will again rise to become the world's largest corporation and, in the process, alter the business practices of an entire industry and dramatically transform the economy of the region where its headquarters is located? Even those not prone to gambling might want to wager on that prospect.

So rapid and dramatic has the change in Northwest Arkansas been during the past decade that as someone who attended their first shareholders' meeting in 1993, I practically qualify as an old-timer. Why, I remember when hotel rooms were cheap and good restaurants were hard to find. It was better to fly into Tulsa and drive two hours to Bentonville than it was to experience the thrill of landing in a prop plane at the fog-shrouded airport south of Fayetteville. Wal-Mart was not subject to the scrutiny it is today.

Of course, change is inevitable. But the extent of change is accelerated and magnified when a single company adds approximately $200 billion in sales volume during the span of 10 years to become the world's largest company with sales of $256 billion. Now visitors to the area can easily spend $150 a night for a hotel, $30 for a steak and $1,000 for a direct flight from New York to the Northwest Arkansas Regional Airport. And Wal-Mart can't do anything without the world noticing. Residents of the area know well that the change that has taken place and have the opportunity to ponder how they feel about it as they sit in traffic and wait for a table at a restaurant.

But there is another angle to the story about how Wal-Mart got big, how vendors flocked to Bentonville and how Northwest Arkansas grew. It has more to do with the evolution of the region's economy, the type of change that is now taking place and will contribute to future growth. The emergence of a thriving service sector of the economy has gone largely unnoticed outside of the Northwest Arkansas. This fascinating aspect of the Wal-Mart growth story is lost on major metropolitan newspapers and business media more interested in a particular community's opposition to a store or the health benefits Wal-Mart offers employees.

The service sector in Northwest Arkansas is where the action is and will continue to be in the future. Wal-Mart will continue to grow, and as it does, its needs and the needs of its suppliers to execute all aspects of their operations will intensify. The math is really pretty simple: Wal-Mart is expected to add $150 billion in sales volume during the next five years, excluding any domestic or international acquisitions the company may pursue. That means suppliers are likely to devote additional resources to serve the account and in turn will require the services of all manner of companies that specialize in packaging, design, logistics, technology, real estate, merchandising, marketing and communications. And those are just a few of the disciplines associated with helping an organization the size of Wal-Mart and all of its suppliers continue to grow.