Friday, March 23, 2007

Bright Ideas From Australia And Wal-Mart

I’ve just had one. I’ve always believed that it’s up to business to change the world – because governments have proved to be too slow, too short-term and too easily diverted. If you think that changing from old fashioned incandescent light bulbs to energy saving “spiral” ones is one way of improving the way we treat this planet (which I do), let’s look at the way the front runners in government and business are going about it.

The Australian government expects to become the first country in the world to phase out incandescent bulbs. Their plan is to have it done by 2010 and their idea is to ratchet up minimum energy performance standards so that it becomes impossible to sell incandescent bulbs. It’s not subtle but it worked to reduce water usage so it should work again, over time.

Faced with the same goal, the largest retailer in the world Wal-Mart is doing something different. Lee Scott said recently in the New York Times, "The environment is begging for the Wal-Mart business model". By that I guess he means scale, relentless focus and an understanding of what matters most to consumers. Wal-Mart is harnessing all three to meet its massive goal of selling 100 million energy saving spiral bulbs by 2008. In my experience, Wal-Mart usually does exactly what it says, so this big stretch goal will be a powerful motivator – especially as it has been picked up widely in the media. Wal-Mart has also committed major marketing muscle and passion to attracting shoppers to these funny-looking bulbs. While every spiral brings rational longer-term benefits (they use 75 percent less electricity, last 10 times longer and save consumers $30 over the life of each bulb), it’s tough to get people to make this unfamiliar choice without an emotional connection. One hugely persuasive way is to act, not just talk. Wal-Mart is pushing spirals by using them as part of an effort to eliminate 30 percent of energy used in its stores. When you remember that energy is second only to labor costs for Wal-Mart, we are talking about savings against a billion dollar line in the account books. Smart for the planet. And smart business.