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Leaders & Success: Innovate. Clarence Saunders' Piggly Wiggly

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Leaders & Success: Innovate. Clarence Saunders' Piggly Wiggly INVESTOR'S BUSINESS DAILY WEDNESDAY, AUGUST 25, 2010 A3 WISDOM TO LIVE BY Gardner On Persuasion Zimmer On Dealing With People Wunderman On Motivation Leaders are almost by definition people who Our business is based on faith in the value The most dangerous question a prospect or Rand On Innovation change minds. of human potential. customer asks is “Why should I?” And he may The great creators — the Howard Gardner, author George Zimmer, Men’s Wearhouse founder ask it more than once. The product and its thinkers, the artists, the Wilson On Excellence communication stream must continue to provide scientists, the inventors — him with both rational and emotional answers. When you focus on your customers, you’re Jefferson On Humility stood alone against the Lester Wunderman, marketing pioneer men of their time. never satisfied. There’s always something you Pride costs us more than hunger, thirst Ayn Rand, writer can improve. and cold. Debora Wilson, Weather.com CEO Thomas Jefferson, third U.S. president LEADERS & SUCCESS IBD’S 10 SECRETS TO SUCCESS Investor’s Business Daily has spent years analyzing leaders and suc- He Had Self-Service In Store cessful people in all walks of life. Most have 10 traits that, when com- bined, can turn dreams into reality. Each day, we highlight one. Innovate: Clarence Saunders’ Piggly Wiggly supermarkets empowered shoppers HOW YOU THINK IS EVERYTHING: Always be positive. Think 1 success, not failure. Beware of a negative environment. BY VINCENT MAO DECIDE UPON YOUR TRUE DREAMS AND GOALS: Saunders’ Keys Write down INVESTOR'S BUSINESS DAILY 2 your specific goals and develop a plan to reach them. 00 Changed the way people Win if you can, lose if you must, but buy groceries. TAKE ACTION: Goals are nothing without action. Don’t be afraid to keep on fighting. 00 get started. Just do it. His Piggly Wiggly made 3 That’s what entrepreneur and in- self-service a standard. NEVER STOP LEARNING: Go back to school or read books. Get novator Clarence Saunders did. 4 training and acquire skills. Saunders is best known for creat- BE PERSISTENT AND WORK HARD: Success is a marathon, not a ing the Piggly Wiggly supermarket Helpy Selfy and Jitney Jungle. 5 sprint. Never give up. chain and changing the way people Piggly Wiggly made Saunders a buy groceries. He didn’t create self- multimillionaire, and he had a man- LEARN TO ANALYZE DETAILS: Get all the facts, all the input. Learn service, but he popularized it. from your mistakes. sion built in Memphis decades be- 6 The concept is standard in today’s fore Elvis’ Graceland. Saunders FOCUS YOUR TIME AND MONEY: Don’t let other people or things grocery stores. dubbed it the Pink Palace for the 7 distract you. “When you think about early food pink granite used on the exterior. DON’T BE AFRAID TO INNOVATE; BE DIFFERENT: Following the retailing, Clarence Saunders was al- The 36,500-square-foot structure 8 herd is a sure way to mediocrity. ways put at the front of the parade,” featuredeight bedrooms, eight bath- Bill Bishop, chairman of consulting rooms, an indoor swimming pool DEAL AND COMMUNICATE WITH PEOPLE EFFECTIVELY: No person is an island. Learn to understand and motivate others. firm Willard Bishop, told IBD. and a bowling alley. 9 The story of Clarence Saunders is Sadly, Saundersnever got a chance BE HONEST AND DEPENDABLE; TAKE RESPONSIBILITY: Otherwise, also one of persistence. He suffered to sleep in the dwelling, as his world 10 Nos. 1-9 won’t matter. several setbacks that would have was soon turned upside down. kept many people down for good. In the latter part of 1922, short sell- TAKE ACTION He simply never surrendered. ers pounced on Piggly Wiggly stock. Saunders always bounced back, Hoping toteach them a lesson, Saun- Avoid Battles Over Prices fighting until the day he died. ders borrowed money and bought “I would say he was indomitable,” nearly allof the availableshares, cor- Whether the economy is being honest and admitting he was said Steve Pike, director of the Pink nering the stock. Cornering is ille- booming or flailing, try to outsold, that the other product was Palace Family of Museums in Mem- gal, so the shorts cried foul. avoid price wars. How much better,” Marn said. phis, Tenn. “You knock him down The New York Stock Exchange let you charge for products and 00 Spell it out. Make sure your com- and he’d get up one more time. He them recoup losses from Saunders. 3 services has a huge impact pany’s press releases and letters to never stopped reaching for the Piggly Wiggly stock was soon delist- on the bottom line. buyers plainly state all the restric- brass ring.” ed. Saunders sued the NYSE but Just a 1% price cut eliminates a tions behind your deals. Clarity re- Groceryshopping didn’t alwaysin- lost. He was also kicked out of his 10th of your profit. Reduce prices by duces the risk of a price war. volve going to a store, browsing the SaunderswasborninVirginia,movedtoTennessee,openedhisfirstPiggly Piggly Wiggly. 5%, and sales volume has to climb 00 Respond with excellence. If aisles, picking items off shelves and Wiggly in 1916 in Memphis and expanded the firm into 1,300 stores by 1923. Piggly Wiggly hung in there. 18% for you to break even, says your rival cuts rates, react with non- taking them to a checkout line. Todayit has morethan 600indepen- Michael Marn, a partner at consult- price changes. Extend your warran- In the old days, you’d walk into a struggling to get under a fence, and of getting groceries. dently owned stores in 17 states, ing firm McKinsey. “If your objec- ties and offer more delivery options. shop, head to the counter and tell the rhyming name occurred to him 2. America soon entered World mostly in the Southeast. tive is to be profitable, you never Deliver your productscloser to the the shopkeeper what you needed. then. Someone once asked him why War I — a time of low food supplies After settling some legal issues, want to find yourself in a price war time your customers need them, Whether you wanted five pounds he had chosen such an unusual and high prices. Saunders returned to the grocery or cause one,” he told IBD. “You’ll and reduce their inventory carrying of flour or a load of canned beans, a namefor his organization, andSaun- “It was a gutsy move on Saunders’ business in 1928, opening a store never get enough volume to make costs. “It’s not (expensive) to offer clerk would get it all for you — or ders’ reply was, ‘So people will ask part, but it was also I think a smart called Clarence Saunders Sole up for the price declines.” this extraserviceand could beeffec- have your stuff delivered. that very question.’ He wanted and move because it wasa period oftime Owner of My Name — or Sole Marn, co-author of “The Price Ad- tive in defending market share,” Having someone else fetch your found a name that would be talked whenthere were tremendous short- Owner Stores for short. vantage,” and David Reibstein, a Marn said. “The competitor with groceries may sound comforting, about and remembered.” agesin themarket,” Haley said. “For “A lot of people don’t realize that marketingprofessor at theUniversi- the low prices may be unable to but that old way of doing business Inside a Piggly Wiggly, shoppers instance, flour, cornmeal, sugar and in Sole Owner Stores, he once again ty of Pennsylvania’s Wharton busi- match your better service, endear- had drawbacks. First, items didn’t were not at the mercy of shop salt were being redirected for the innovated,” Haley said. “It wasn’t ness school, share tips. ing you even more to the customer.” show clear prices. Second, clerks clerks. They were free to roam the troops, and that caused a tremen- just once again a self-service store. 00 Spotlight quality. Promote the 00 Keep it short. Reibstein said: might take a long time to serve you. store, check out the merchandise dous increase in prices in the gro- He also added . the meat depart- differences between your products “Deal with heightened price sensi- and get what they needed with their cery stores.” ment, he added a deli department, and services and those of your ri- tivity during the bad economy with- The Early Steps own two hands and feet. he added a bakery. And so the Sole vals. If your cars offer more safety out destroying your long-term prof- He was born in 1881 to a poor fami- Prices on items at Piggly Wiggly The Rise Owner Store created today’s super- features, highlight that. “Empha- its. Adopt temporary price reduc- ly in Virginia and moved to Palmyra, were clearly marked. No one pres- Piggly Wiggly and the self-service markets. About the only thing that’s size those benefits as justification tions, not permanent ones. If you Tenn. According a 1992 article in suredcustomers to buy milk orpick- concept took off. Saunders opened missing is the seafood department for your higher price,” Marn said. offer a discount, make it a 30-day the Tennessee Historical Quarterly les. And the biggest benefit at the nine stores in the Memphis area and the pharmacy.” 00 Don’t overreact. Suppose you ac- sale, or provide a coupon but keep titled “Clarence Saunders: The Pig- Piggly Wiggly was that shoppers within the first year of business. Sole Owner Stores were a hit, and curatelylearn thatyour rival is slash- your price at $250. You maintain gly Wiggly Man,” he was so poor, he saved money.
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