Is Wal-Mart’s $250 billion “Made in the USA” Program Another “Crafted with Pride Campaign”? (II)

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In early 2014, Wal-Mart Store Inc. announced its commitment to buy $250 billion “Made in the USA” products (including textiles and apparel) over the next 10 years ($50 billion annually) with the hope to “help spark a revitalization of U.S.-based manufacturing” and “create jobs in America”.

So how is the program going so far, especially in the textile and apparel (T&A) area?

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From exploring the company’s website, it is interesting to find that around 30 kinds of “Made in USA” T&A currently are being sold at Wal-Mart. However, majority of these T&A products are basic socks priced less than $10/unit. Wal-Mart also sells two types of men’s jeans, priced at $24/pair and $22/pair respectively. Although such a price level is higher than most jeans sold at Wal-Mart (which range from $8 to $20 per unit on average), it is still at the low-end of the market (see the chart below adopted from a Just Style report on the global jeans market).

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On the other hand, as part of the “Made in USA” program, Wal-Mart sponsors a U.S. Manufacturing Innovation Fund with the purpose of “making it both easier and more competitive to make household goods in the U.S.”. T&A is one area this fund is willing to support as long as the research projects could “reduce the cost of producing textiles and apparel in the U.S., including weaving, fabric dyeing, cut & sew.

So what’s your view on Wal-Mart’s “Made in USA” initiative in the 21st century? How is it different from the “Crafted with Pride Campaign”? Will it bring back manufacturing jobs in the US as its objective stated? Will Wal-Mart repeat its record in history again? Please feel free to share your view.

[Please do not leave comment until after our case study 4]

Additional reading: Is Wal-Mart’s $250 billion “Made in the USA” Program Another “Crafted with Pride Campaign”? (I)

 

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Author: Sheng Lu

Professor @ University of Delaware

18 thoughts on “Is Wal-Mart’s $250 billion “Made in the USA” Program Another “Crafted with Pride Campaign”? (II)”

  1. The “Made in the USA” campaign sounds like a great idea to me. It offers more jobs in the United States. Even though it seems like only the basics are being made in the USA right now, I believe that Wal-Mart is taking a stand and could possibly be a ‘role model’ for other companies.

    I believe that the difference between the “Made in the USA” and the “Crafted with Pride Campaign” is that the Crafted with Pride Campaign is about informing American customers to purchase more items made domestically. While the “Made in the USA” campaign above focuses on Wal-Mart’s personal commitment to buying items manufactured in the USA. and have them readily available for their customers.

    I’m not sure that I can say this will 100% bring back manufacturing jobs to the US because a lot of other factors play into that like production costs, but I do believe it is a start. Maybe other companies will follow their lead? Maybe Wal-Mart will expand their product assortment that is created in the USA. It does helps their image and they have a customer base that would greatly appreciate their efforts with this commitment.

  2. It is very interesting to see Wal-Mart implementing such a large scale initiative after reading in Case Study 4 how they were involved with the Crafted in Pride campaign. Wal-Mart, despite being America’s largest retailer, has been in the media a great deal criticizing their overall treatment of product suppliers and environmental practice to just to name a few. Many Americans already have a less than favorable view of Wal-Mart due to this, so I wonder how they are thinking of this initiative all together. After looking at the Crafted with Pride campaign in detail, it’s important to note how harshly Wal-Mart ended up affecting it towards the end. Their drop in support was the ultimate downfall of the Crafted with Pride campaign, and now years later they are starting their own initiative that would support the Crafted with Pride campaign’s mission. Although their mission is great and has the goals that Americans would like to see, I am not sure their raise in prices in these Made in the USA products will go over with their consumer as they are so used to their “everyday low prices” business model.

  3. To me, this campaign is very ironic due to Wal-Mart’s issues with sourcing in the past. I know that they were originally a part of the “Crafted with Pride” campaign in the 1980s, but then it came out that they were producing goods in Bangladesh which was a huge scandal. Them trying to say again that they are producing “Made in USA” products seems like it might end up in the same way as before. The only positive thing is that since they did have such a controversial past with sourcing, going back to “Made in USA” products will get a lot of publicity. I’m also worried that sourcing domestically will cause Wal-Mart to need to raise its prices since it costs more to produce goods in the US than abroad, and since their customers currently want “everyday low prices” they might not be happy about the price increase and even if they are made in the USA, they might not want to buy them.

  4. I do think Wal-Mart’s initiative is another Crafted with Pride Campaign. They are very similar which is the reason as to why I think it is the same. Wal-Mart’s $250 billion initiative is a commitment for 10 years to source only within the United States; whereas, the customer who shops at Wal-Mart will most likely not care if their products are being produced internationally or domestically, as long as the products are to the price points that the customer likes to purchase items at. Price is definitely one of the top priorities for this customer so sourcing from America must also include “cheap” products or the customer will respond negatively to the initiative.

  5. I find Wal-Mart’s made in the USA initiative unrealistic. Customers go to Wal-Mart for everyday low prices and when you produce in the US, prices are automatically higher than normal. This doesn’t seem like something that would benefit Wal-Mart in the long run. I do think that this will create more jobs by having more manufacturing in the US but I do not think it matches up with Wal-Mart’s low prices. Where products are manufactured is not the top priority for customers nowadays.

  6. One of the main reasons that the Crafted with Pride campaign failed was because consumers were more price sensitive and didn’t care as much about where their clothes were being made. I feel like that hasn’t really changed since the campaign ended, people are just as price sensitive maybe even more price sensitive. I don’t think that the Wal-Mart initiative will be much better than the Crafted with Pride campaign because a lot of people do not trust Wal-Mart. They have been in the media a lot recently for their working conditions for their employees so consumers don’t believe in the brand anymore. Since there is little brand loyalty consumers are not going to believe in their campaign efforts.

    1. It is true that US consumers are still very enthusiastic about products with the label “Made in USA”, at the same time still choose products mostly based on price.

  7. Though it is probably mostly image driven, I do have to give Wal-Mart credit for establishing this initiative. The ultimate goal of bringing manufacturing jobs back to the US, however, I do find to be unrealistic. Basics such as socks and jeans are not going to be enough to open factories and hire employees. It still is a big statement for a retail giant like Wal-Mart to be making. I think it more has to do with creating an image for the American people that they are on their side considering all the adversity Wal-Mart often faces when they build locations. I think it is a clever strategy considering the Wal-Mart customer (as mentioned in one of the articles for the case study) is largely family-oriented, christian, republican, etc. which also can translate to views against increasing imports and very in favor of preserving domestic manufacturing. [Again, this generalization of the customer is derived from articles, I am not making this stereotype]. As I mentioned in class, I think that this initiative differs from Crafted with Pride as this is actually Wal-Mart’s own program rather than one they are just a part of. This, to me, would mean that they are more invested in it since failure would reflect directly on them as a company.

    1. Excellent comment! I agree that it seems to be a smart initiative for Wal-Mart. First, although $250 billion only accounts for less than 10% of Wal-Mart’s total sourcing value, it does sound a lot. No other retailer nor apparel company has the financial capability to make such a commitment. This will be good for Wal-Mart’s publicity and image. Second, it is interesting to note that the funding provided by Wal-Mart will mostly be used to develop technologies that can further reduce cost of production in the US. This means, Wal-Mart potentially can get financial benefits from outcomes of these funded research. It is an “investment” for sure rather than simply a PR campaign like the crafted with pride. Again, great thinking and inspiring comment~

  8. I think Wal-Marts “Made in the USA” campaign is a different approach to supporting the US T&A industry. I believe it is one they can support long term and it can be very beneficial to the US economy and T&A industry.
    Although they are only producing basic apparel such as socks and denim it is a realistic way for the super store to maintain a commitment to the american industry while still competing with other stores. At the end of the day their main goal is to keep their customers coming back and that will only be by offering the lowest price possible. Because customers are so price sensitive they need to maintain overseas production however I think it is good for their reputation to continue the “made in the USA” campaign in the way they are promoting it because they are selling US made products all while keeping low prices and satisfying customers needs.

    1. very well thinking. Your comment raises a very interesting question: why all “Made in USA” apparel sold by Wal-Mart are just basic apparel such as sock, shirt and jeans? Isn’t these are the products that :1) most low-wage level developing countries can easily produce; 2) are not very time-sensitive, meaning they can endure longer lead time? More logically, isn’t “Made in USA” should focus on making more high-end apparel products just like Western EU countries?

  9. Wal-Mart’s “Made in USA” Campaign is different from the Crafted with Pride Campaign because while Made in USA is focused on producing products that are 100% made in the USA, the pride campaign focuses more on influencing consumer behavior in buying domestically made textiles and apparel.

    I think that Wal-Mart’s “Made in USA” initiative is great for our industry but may be difficult to achieve. Its image for the campaign is great in the sense of bringing back pride in producing in the U.S. and potentially creating more manufacturing jobs, but it definitely will be hard to achieve the 100% made in USA products. Although they have developed items so far that are Made in USA, I don’t see them being able to achieve this goal long term and expanding their product lines to become 100% made in USA. As stated in one of the readings for the case study, “We are seeing more of a resurgence of made in the region as opposed to Made in the USA.” WHile there is growth in the yarn and fabric production in the U.S., “We must remember there is very little cut-and-sew left in the U.S.” It will definitely be difficult to expand their products to Made in USA, but with success in a few products already eventually they may achieve this goal.

    Although I believe it will be a slow growth in the Made in USA initiative, I do believe there are some benefits associated with this project. If they are able to expand to more products becoming 100% made in USA, they have the potential to bring back more manufacturing jobs. Right now they have around 30 kinds of made in USA items, so soon they will expand and bring in higher quantities of a variety of items, requiring more employees to be able to meet demand of customers.

  10. I think the Wal-Mart “Made in the USA” initiative is a great way to support the nation although the products are not the most influential. In today’s society it is hard to support home based products since the imported products are so much cheaper to buy and sell. Most consumers are just looking for what is the cheapest and is not concerned with where it is made. I think that if the products they sold were more influential than just socks and two pairs of jeans, that the initiative would have more affect on consumers. Crafted with Pride seemed to want to take over all production from over seas factories and have items produced and sold in the US only. This is different from Wal-Mart’s “Made in the USA” because they are just trying to show support and create some jobs in America but they are not trying to take all the production back from overseas. I don’t think this initiative will bring back jobs to America but it may support new jobs in America in addition to those jobs in overseas countries.

  11. The Crafted With Pride in the U.S.A. Council is a textile industry group that urged consumers to buy American-made clothing and simultaneously protect domestic jobs, while the Made in the USA is Wal-Mart’s pledge to sell more items that were manufactured in the USA for their consumers, while also supporting American jobs. It is ironic that Wal-Mart is demonstrating support for domestic manufacturers, when they have been known in the past for poor treatment and working conditions in the factories from which they have outsourced. I think it is hard to say whether or not Wal-Mart’s campaign will bring back manufacturing jobs, as it’s objective has stated. According to this article, Wal-Mart is selling around 30 U.S. made products in their stores, which mainly consist of socks and jeans. I imagine socks are not the best selling item they offer and their jeans are priced higher than the other jeans they sell, therefore if these items are not turning over in their inventory. I do not imagine them ordering bigger quantities of this specific merchandise if it is not moving off the floor, so I think they need to expand their product offering in order for this initiative to truly make an impact, but it is a great start.

  12. I feel that this is ineffective and that Wal-Mart is consistently flip flopping on the issue. I think it is different from Crafted with Pride because it is not lacking acknowedgement of the impact of other countries on the American economy and how its very hard to avoid, and focusing on making american goods and not just purchasing American goods. I don’t think it will bring back manufacturing jobs because I dont think their products will be bought in comparison to foreign products sold at walmart becuase of their higher price points. Unfortunately I do think Wal-mart will repeat their history again.

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