Life Without Wal-Mart

At Winstead's, when the food arrives, Bernstein grabs his burger in one hand and the pepper shaker in the other. He peppers every bite separately.

Bernstein's employees weren't excited when their boss landed the Wal-Mart account, according to several agency employees who spoke to the Pitch. Wal-Mart wanted rudimentary ads with no flashy technology — nothing that would make the company look big. The campaign worked, and even after Wal-Mart surpassed $1 billion in sales in 1979, Wal-Mart still used the low-budget Guthrie commercials.

Bernstein says Walton began calling Bernstein-Rein the "keeper of the Wal-Mart culture."

But it wasn't enough to guarantee that the agency would continue working for Wal-Mart. Every couple of years, Walton put the deal up for review. Bernstein recalls a meeting in the mid-1980s with Walton and his No. 2 executive, David Glass. Bernstein asked if Bernstein-Rein could finally become the company's agency of record. Walton turned to Glass and said, "David, you think we should make this permanent?" Bernstein says he was asked to step out of the room so they could discuss it. When he came back in, Walton said: "Let's just leave it in test."

Bernstein finishes his milkshake about the time he has peppered his last bite of burger. He gives the waitress a generous tip. He stops just outside the restaurant's front door to finish his story.

In 1985, Walton called Bernstein to request a new direction for his ads. Walton had been getting pressure to replace the foreign goods in his stores with American products. The demands came from inside: Hillary Rodham Clinton was a member of the Wal-Mart board of directors. She and Bill Clinton, then governor of Arkansas, helped convince Walton to buy American products.

The first company that Walton found was Farris Fashions in Brinkley, Arkansas. Walton had Glass negotiate the deal with Farris. Glass agreed to buy 50,000 flannel shirts that year. Afterward, Walton told Bernstein that he wanted to promote the new campaign in every commercial. "What can we do with this?" Walton asked. "I want to make this big."

Bernstein-Rein's new Wal-Mart ads featured American factories making products for Wal-Mart. The retailer was, according to the commercials, saving small towns from ruin. Eighty such television ads eventually ran, and Wal-Mart would claim that it kept $6 billion worth of American business from going overseas. The campaign became so big that Wal-Mart decided to hire a second ad agency in 1987. From then on, GSD&M of Austin, Texas, split the contract with Bernstein-Rein.

The "Buy American" slogan quickly became Wal-Mart's most famous ad campaign and earned it widespread praise for attempting to promote American manufacturers.

It also became the biggest mistake in Wal-Mart's history.

When Walton died on April 6, 1992, David Glass became the new face of Wal-Mart.

Glass had joined the company in 1976 as vice president of finance. He rose through the ranks until he took over in 1988 from Walton, who was slowly retiring from the business. More than anything, Glass is credited with modernizing Wal-Mart. He streamlined inventory by putting computers in the stores for the first time. He also had a vision to bring Wal-Mart into the largest market on the planet. By this time, China supplied much of what Wal-Mart sold, and Glass wanted the billion underserved Chinese consumers to shop there, too. (Wal-Mart now has 67 stores and 30,000 employees in China.)

Glass retired in 2000 and bought the Kansas City Royals. But during the Glass era, Wal-Mart sales grew tenfold.

Glass was also behind Wal-Mart's worst public-relations disaster.

On December 22, 1992, NBC's Dateline ran a segment that attacked the "Buy American" campaign. It began with footage shot at factories in Southeast Asia where children as young as 10 were sewing clothes for Wal-Mart.

Dateline then took hidden cameras into a dozen Wal-Mart stores, where foreign-made clothes hung on racks under "Made in the U.S.A." signs — the concept dreamed up by Bernstein-Rein.

Although Dateline didn't mention the agency by name, the show attacked TV spots made by Bernstein-Rein. The ads showed a sweater factory that benefited from Wal-Mart's business, but Dateline found that the factory had closed just a year after the ads ran, when Wal-Mart found a cheaper distributor overseas and put 400 factory employees out of work.

Looking for a response from Wal-Mart, reporter Brian Ross sat down with Glass and asked him about the "Made in the U.S.A." signs over foreign goods. Glass explained that it was a store-level mistake.

Ross asked him about child labor and a fire that killed 25 workers in a Bangladesh factory where the doors were locked.

"There are tragic things that happen all over the world," Glass responded in his slow drawl.

"That's all you have to say about it?"

"I don't know what else I would say about it," Glass said. A Wal-Mart spokesman ended the interview, and Glass walked off.

Two weeks later, Glass invited Dateline back, saying he had been unprepared. Glass said he had sent a Wal-Mart employee to Bangladesh and had found no evidence at the factory of child labor.

"Children," Glass explained, "you and I might perhaps define children differently in Bangladesh." Glass questioned the video evidence. "The pictures you showed me mean nothing to me. I'm not sure who they were or what they were."