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The worlds biggest retailer Wal Mart who is also having a tilt at buying Coles Myer claim that they want to sell every one of its regular customers–100 million in all–one compact fluorescent bulbs. In the process, it may change energy consumption in the United States much to the delight of tree huggers.
Teaming up with General Electric, which owns about 60% of the residential lightbulb market in the United States, Wal-Mart wants to single-handedly double U.S. sales for CFLs in a year, and it wants demand to surge forward after that.
Diane Lindsley, the hardware buyer who decides what goes in the lightbulb aisles at Wal-Mart, thinks 100 million swirls is perfectly reasonable. “Yes,” she says, “it’s rational, I think.” Before she started buying bulbs for Wal-Mart just three years ago, Lindsley didn’t even know what CFLs were. Now she pauses in a way that suggests the kind of determination Wal-Mart can bring to bear when its buyers decide they are going to sell Americans something. “We have plans in place to where it may not take that long.”
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Which presents a daunting challenge: Wal-Mart’s push into swirls won’t just help consumers and the environment; it will shatter a business–its own lightbulb business, and that of every lightbulb manufacturer. Because swirls last so long, every one that’s sold represents the loss of 6 or 8 or 10 incandescent bulb sales. Swirls will remake the lightbulb industry–dominated by familiar names GE, Philips, Sylvania–the way digital-music downloads have remade selling albums on CD, the way digital cameras revolutionized selling film and envelopes of snapshots. CFLs are a classic example of creative destruction.
GE, facing the prospect of mothballing a centurylong franchise in lightbulbs–well, GE is smiling and swallowing hard. “CFLs are taking off,” says Robert Stuart, who heads consumer marketing at GE for lightbulbs. “No one has been as vocal about this recently as Wal-Mart. One hundred million bulbs in a year? It’s an aggressive goal. GE will find a way to make sure they are able to do that.”
GE, too, has launched a green business initiative: ecomagination, an effort to make environmentally sustainable technologies an ever-larger part of GE’s business. Swirls fit well, despite the inevitable cannibalization. “The real issue is, if we don’t do it, someone else will,” says GE’s ecomagination vice president, Lorraine Bolsinger, of Wal-Mart’s effort to push CFLs. “It’s old thinking to imagine that you can hold on to a business model and outsmart the consumer. You can’t.”
The impact of compact fluorescents cascades outward. Since every CFL has the life span of 6, or 8, or 10 equivalent incandescent bulbs, if Wal-Mart alone sells 100 million swirls in the next year, it does away with the need for 100 million old-fashioned bulbs to be manufactured, packaged, shipped, bought, and discarded next year–and every year until 2012 or beyond.
