January 3, 2007

Wal-Mart’s CFL Goal Changing Lighting Industry

In order to reach its goal of selling 100 million energy-efficient compact flourescents by 2008, Wal-Mart is trying to change the economics of the light bulb industry and is reaching out to unlikely partners like Google and Home Depot, The New York Times reports.

To reach the mark, Wal-Mart needs to increase total sales of the bulbs in the U.S. by 50 percent. Wal-Mart sold only 40 million in 2005, compared with about 350 million incandescent bulbs.

But not everyone is thrilled. CFLs last eight years, which means manufacturers, like General Electric and Osram Sylvania, will sell far fewer lights if Wal-Mart succeeds.

Accrding to the story, in a meeting with executives from General Electric, Wal-Mart’s largest bulb supplier, “the message from G.E. was, ‘?Don’t go too fast. We have all these plants that produce traditional bulbs.’”

“We are going there,” the Wal-mart buyer said. “You decide if you are coming with us.”

Philips, despite protests from packaging designers, agreed to change the name of its compact fluorescent bulbs from “Marathon” to “energy saver.” To keep up with orders, Osram Sylvania took to flying entire planeloads of compact fluorescent bulbs from Asia to the United States.

In-store marketing has increased sales, but to reach 100 million, Wal-Mart has to do much more. In the fall, the company began reaching out to competing retailers and Internet companies.

Google and Yahoo are in talks with Wal-Mart about how to use their search engines to promote the bulbs.

But Home Depot and Lowe’s are not cooperating with their larger rival. “We don’t think we need an organization like that to sell more CFLs,” said Ron Jarvis, the vice president of environmental innovation at Home Depot.

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