United We Brand. How one American company takes a stand for its USP.

“You treat people nice, they gonna treat you nice,”-Rex, an out-of-retirement greeter in Wal-Mart’s 1993 TV ad campaign.

An ad agency lets the people sell Wal-Mart’s charms
For over 17 years, Austin’s GSD&M has teamed with Wal-Mart to sell the Kasbah’s softer side of what has become to be known by America's news media as the giant retailer’s cutthroat business practices (driving mom & pops out of business, shuttering Main Street, buying manufactured goods made by Honduran slaves, failing to promote women and being hideously ‘de classe’). Most recently, certain consumer groups have begun complaining that the actual Wal-Mart shopping experience--once you pass the friendly greeter--has become dehumanizing. Meaning you don’t see another employee till checkout.

But there are 2 reasons why Americans still love Wal-Mart (WM). One is WM has brought low prices to millions. The second is their advertising.

GSD&M’s television ads portray Wal-Mart’s universe as friendly. Welcoming. A community of shoppers and employees who get genuine satisfaction out of being there. Check out these scenarios:

Gloria, the clerk (1992) recalls helping an old, half blind lady with her weekly shopping. The sad family (1991) that looks for a Wal-Mart even on its vacation so it won’t feel too disconnected from home. Rex, the out-of-retirement (1993) greeter who says “How y’doin?” all day long. Teenager goes on a Maybelline and L’Oreal shopping spree (1998) to do a makeover for her frumpy mom.

Here’s some homespun wit, with an intercut interview (1992) of a sporting-goods clerk and his regular customer:

CLERK: He loves to fish. More, he loves to talk fishing.
CUSTOMER: Of course, he does ask my advice on occasion.
CLERK: He does have an opinion.CUSTOMER: And I give it to him freely.
CLERK: I get it whether I ask for it or not.

Bottom line: The behemoth’s ads push all the right buttons. It’s about a relationship. One that Wal-Mart has forged with its customers. Sure, prices and selection are at the heart of Wal-Mart’s success, but years of warmhearted ads have given viewers permission to see the cutthroat businessmen at least as neighbours, if not actual friends.

Interview with a Wal-Mart advertising executive
Kathie Haydon started as an intern with GSD&M in Austin and has been a media buyer now for 8 years, exclusively on the Wal-Mart account.

DOBI: Wal-Mart’s got a lot of messages these days.
HAYDON: One message may make sense for moms with new babies; but not good for college students. It has to be relevant to the audience. The message goes beyond demographics – adults 18-24 – [it] goes beyond lifestyles. You need to find a common denominator or tailor the message for a specific pocket. Get it to them.

From a media perspective, Wal-Mart was not as complicated when I first started as they are now. Back then, they were 100% TV - not even national. If I can put on my media nerd hat … What happens is someone expands their locations and becomes more diverse from a geographic perspective. Once you buy regions - you hit a point where it becomes more expensive to buy regions versus just going national.

We took baby steps and did a deal with one network - we didn’t use to do national buying but we have now for 8-10 years.

DOBI: How do you share the territory with Bernstein-Rein?
HAYDON: Bernstein-Rein has their campaigns and we have ours. We plan our campaigns then provide BR strategic guidance to make the media buy for TV. It’s ingenious. So only 1 agency actually does the buy; we can negotiate best that way. We do the creative campaigns: today (and it changes) in the middle of the year a [Wal-Mart] department may decide to go out and get support by getting more dollars at Wal-Mart.

DOBI: What are your current campaigns?
HAYDON: We have many.1) Corporate reputation campaign = good jobs. Goal= avert negative perceptions of WM employment labour practices: We have good jobs for associates: health benefits, good pay, career opportunities, creating community jobs. We talk to our associates, our customers, and opinion leaders that could influence Wal-Mart’s move into a community. We talk to PTA Moms, government leaders, community influencers.

DOBI: Where can the public see the corporate reputation campaign?
HAYDON: CNN, any news network. It’s in its 3rd year.

DOBI: Do you track how well it’s doing?
HAYDON: The ROI is measured in different ways. Wal-Mart does a monthly survey with their customers, asking them how they feel with WM as a company. - WM shares that information with GSD&M via a 3rd party company. (I haven’t looked at it [the corporate campaign] lately. It must be doing OK or else we wouldn’t be running it…). And then there’s monitoring the press: To see if perhaps we've made an impact in terms of people seeking out the truth in terms of jobs we provide.

2) Item price campaign: Message: "Reinforcing our price leadership in the marketplace. [This is smiley face, Wal-Mart rollback created by BR]Always low pricing always." We use this brand message in all our campaigns except holiday and back-to-school.
3) A quality initiative: "We just want to maintain that while we have everyday low prices that it's everyday low prices on quality goods. We sell high quality things at low prices." TV: Focuses on the fresh food and apparel and home.
4) Back to school: We're the destination for back to school supplies and apparel and office supplies. [This campaign hasn't started yet]
5) Holiday: Highlights top holiday items - destination for Xmasor whatever holiday. [Stresses low prices]
6) Photo campaign: The photo dept. wants some exposure in marketplace.Kicks off next week.
7) Financial services: support in-store: Rolling them out.

HAYDON: I just have so much respect for them as a company. They're great trying to bring the good life to everyone through their everyday low prices on quality goods.

DOBI: What do you like most about working on the Wal-Mart account?
HAYDON: There's not one thing - it's working with their marketing department ... their people are just so nice. They're such a smart, open company and they're huge in most people’s eyes yet they don't see themselves that way - they're humble. They're not about extravagance - so much respect. They're always changing and adapting - we have to change and adapt with them. Change is good and challenging and that's why I never get bored.

You mentioned direct mail. There is a need to be relevant to everyone - there is no mass communications anymore - there's a rise to accountability - ROI needs to be measured and direct.

Ordinary people
So just how do the WM suits get the friendly people they use in their product advertising? In August 2003, Adweek magazine asked the experts who have the process down to a science. The creatives at Wal-Mart’s other huge ad agency: Bernstein-Rein in Kansas City, Mo.

“It’s pretty simple: We spend an awful lot of time in Wal-Mart stores, in writer, art director and producer teams,” said Kirk Kirkpatrick, SVP, Executive Creative Director. “We’re looking for people not too shy, not too intimidated. Not everyone wants to be on television.” Casting usually takes two or three days. Then it’s a matter of readying participants for their on-camera interview; there are no scripts or storyboards.

“Often we have dinner or lunch with them before we do the filming,” added Kirkpatrick, who has worked on the account for seven years. “We meet the families and go out of our way to make the shoot feel like a conversation over a cup of coffee.” Kirkpatrick finds his stars at elementary schools picking up their kids and in less obvious places. Reading a magazine at his dentist’s office, he learned of a couple who took in the husband’s eight siblings when their parents died. "I thought, ‘Boy these people are Wal-Mart shoppers.'" He looked them up in the phone book and reached the oldest brother. “I asked if they spent much time at Wal-Mart. He said, ‘Are you kidding? We spend all our time at Wal-Mart.'

“The real-people strategy works because it fits the Wal-Mart brand personality,” said Randy Curtis, VP of Creative and Media. “There’s not a lot about hype or showbiz, it’s about real people and real needs.”

One nation under Wal-Mart
In March 2003, Fortune declares Wal-Mart its most admired company, marking the first time the world’s biggest corporation is also its most respected. Wal-Mart is not just Disney’s biggest customer but also Procter & Gamble’s and Kraft’s and Revlon’s and Gillette’s and Campbell Soup’s and RJR’s and on down the list of some of America’s revered-brand manufacturers. It also means that the nation’s biggest seller of DVDs is also its biggest seller of groceries, toys, guns, diamonds, CDs, apparel, dog food, detergent, jewelry, sporting goods, video games, socks, bedding, and toothpaste – not to mention its biggest film developer, optician, private truck-fleet operator, energy consumer, and real estate developer.

That raises a tricky question: What exactly, is the brand [behavior] here? As Wal-Mart flexes its muscle as a marketer and not just a merchandiser, it could accelerate the demise of weaker brands. Even P&G has refocused on just 12 powerhouses, like Crest and Pampers. Now manufacturers worry about losing their direct connection to the consumer. Two decades ago, 65% of their ad budgets went to television and other mass media while today 60% go to retailers for in-store promotions and the like. The worry, as a Forrester report predicts, is that “Wal-Mart will become the next Proctor & Gamble.” The nightmare: Wal-Mart becomes your company’s new VP of Marketing.

How Wal-Mart thinks has never been a big mystery: Buy stuff at the lowest cost possible, pass the gains on to the consumer through superlow prices, watch stuff fly off the shelves at insane velocity. (Critics who say Wal-Mart is obsessed with its bottom line have one thing wrong: Wal-Mart is obsessed with its top line, which it grows by focusing on the consumer’s bottom line.) For its suppliers, if the trip on Gulliver’s coattails is no joyride it sure beats a Lilliputian underfoot.

Over the years Wal-Mart has thundered its way up the retail food chain, first flattening mom-and-pop stores, then stepping on discounters like Ames, Bradlees, and Kmart, and finally sitting on specialty retailers like Toys “R” Us – threatening in effect to be the category killer.

Just ask your grocer. Only ten years after launching its food business amid much guffawing, Wal-Mart is the world’s biggest grocer, driving down prices on average of 13% in the markets it enters according to a UBS Warburg study. The last castle of medieval retailing is used cars. Visit the parking lots of several Houston Supercenters and you’ll find a dealer quietly testing a no-haggle approach under the name Price 1. What else? Well, what about Microsoft? Log on to walmart.com and you’ll find $199 computers powered by a fledging Windows competitor.

Financial services at your fingertips ... You don’t need a bank to wire transfers and money orders. Wal-Mart undercuts Western Union and the United States Postal Service on wire transfers and money order fees. Wal-Mart vacations. Internet access. Flower delivery. Online DVD rentals á la Netflix. Playing right now at a Wal-Mart near you.

Now, no category seems safe.

Compartmentalization
In the search to uncover the definition of Wal-Mart’s brand category, I spoke with Troy Steiner, Wal-Mart’s Senior Media Director of ten years.

DOBI: What do you do?
STEINER: I’m responsible for every piece of advertising Wal-Mart does everywhere in the world.

DOBI: What is your brand?
STEINER: Our brand is having low prices. E-L-P. Everyday Low Prices. A wide assortment everyday. This is our business strategy; it is not a marketing ploy. We pass our savings onto our customer. For our customers to get what they want when they need it. Our brand fits perfectly: we pass our efficiencies onto our customers.

DOBI: Who is Wal-Mart’s targeted customer?
STEINER: You need to know your audience; do lots of research, know your shopper. Our predominant shopper is women 18-49 with children.

DOBI: What do you offer your customers?
STEINER: We offer three things:
1) friendly associates
2) a wide assortment of product
3) low price

We call it the three P’s: People, Product and Price. Early on, Wal-Mart ran specific sales and today we sell a product for a price, maintaining a package around a “rollback.”

DOBI: Why do you use ‘real people’ advertising; employee and customer testimonials?
STEINER: Our employees are associates – they are real people and our real people campaign is being as credible, real, and believable as we can to our customers. Using supermodels is less believable. When a supermodel falls, you fall with them. So our associates and our customer testimonials means that we make sure our advertising fits with their product. That we’re more alike.

DOBI: In a New York Times article on September 9th, 2004, your CEO H. Lee Scott Jr. had this quote: “What we have found is that there is a different group of stakeholders today that are important, and that is a person who’s not familiar with Wal-Mart stores, they’re not familiar with what we stand for. So their view of Wal-Mart stores is what they read in the newspapers and what they see on TV. We have decided it is important for us to reach out to that group.” What does he mean?
STEINER: What you’re reading in the media today … Wal-Mart takes a beating … they don’t know the full story. So we’re telling our story about our reputation. It’s mostly political and airs where the media is most likely to hear it. In our Los Angeles Baldwin Hills store, on Larry King Live, CNN, Meet the Press – where the media is most likely to hear it. [Radio spots on NPR] What these messages say is 'Wal-Mart is a good place to work, a good member of the community'.

“This new approach makes sense, given the charges that have been hurled against the company recently. But if Wal-Mart wants to improve its image it should focus less on shaping its message and more on changing the way it does business.” – A New York Times editorial (Sept 14) titled “Wal-Mart’s New Spin.”

Looking back: Wal-Mart steps outside the box
In a departure from its traditionally conservative advertising, big-box retailer Wal-Mart confronted critics with a new series of television ads created by Publicis Canada [Marketing magazine Aug. 2000]. Typically, Wal-Mart advertising favoured images of happy customers interacting with pleasantly blue-smocked sales staff. “The store experience is certainly important,” conceded Gord Muirhead, brand director at Publicis Toronto office. “But it’s also important to look at how our customers interact with the store outside the actual box itself.” Earlier this year, Publicis and Wal-Mart decided to shift to what they call ‘a real approach.’ Two television spots – one launched in April, the other in August – show actual people in their own homes, speaking their own words.

The first spot features real-life Brampton, Ont. inhabitant Ian Morton, who says when he "heard that Wal-Mart was coming to town, I was afraid they they’d be taking rather than giving to the community.” He now, of course thinks differently. The strategy, says Muirhead is to tackle head-on the public perception that Wal-Mart harms small-town economies.

“The guy’s not scripted,” insists Andrew Pelletier, director of public affairs for Wal-Mart in Mississauga, Ont. Pelletier adds that there are now 30 communities from B.C. to Newfoundland that are aggressively lobbying to get a Wal-Mart store built in their town.

The second spot confronts teenage shoppers’ distaste for large retailers as a place for fashion. The 30-second ad is a back-to-school campaign for the 725 Original private label line of clothing. A gathering of small-town under-20 set was filmed in the basement rec room of one of their own homes in Belleville, Ont. There is no mention of the brand.

“We felt it was very hard to reach teenagers,” explains Wal-Mart’s Director of Marketing Lou Puim. “If you try to create an ad they’ll just tune it out. They want to talk about things that they want to talk about. So we recruited some younger people and got them to talk about whatever they wanted.”

Wal-Mart marches well ahead of Zellers on the ethnic marketing front
In May 2003, Wal-Mart’s Canadian Agency, Publicis Toronto talked about Wal-Mart’s campaign that cut across all demographics. Wal-Mart began pursuing Canada’s multicultural market whole hog in 1997, mounting TV spots using real people of ethnic origin, telling their own stories, in their languages, about their relationships with Wal-Mart. “The catalyst was really our customers, because the stories are about our customers,” said Lou Puim, director of marketing with Wal-Mart Canada in Mississauga, Ont.

Wal-Mart began with four languages or language groups – Italian, Portuguese, South Asian and Cantonese - in Ontario, in 1997, expanded into Calgary, Edmonton and Vancouver the following year, and has since added spots in Spanish, Mandarin and Southeast Asian languages. Amongst others, the company placed 16 ads in Italian and 14 in Portuguese languages on Ontario ethnic stations. “Cantonese appears in 12 spots a week, Mandarin-which we just added this year – 11 spots per week and Southeast Asian 16 spots per week,” Puim rhymes off in Marketing.

The ethnic market is significant and growing fast. More than 43% of Toronto’s population is now foreign-born, making Toronto the most ethnically diverse city in the world. But is marketing specifically targeted to multicultural groups even necessary, when the primary drivers for discount shoppers are low prices, good product assortment and easy accessibility?

“Emphatically yes!” says John Torella, retail analyst and senior partner with Toronto-based retail consulting company J.C. Williams Group. "Reaching the multicultural market also requires more than just foreign-language ad campaigns,” ads Torella. “The way to capitalize or optimize the market is to build relationships with it. It’s not just about selling. It’s about serving the market. And I think if you don’t take that broad perspective, what you end up building is marketing campaigns versus relationship-building campaigns."

Wal-Mart, because of its size and because of its profitability, is prepared to make investments in the long term by laying the infrastructure in place that addresses the holistic needs of this marketplace. And it also has the infrastructure in technology to adjust its assortments to capitalize on particular trade areas.”

Veteran Wal-Mart watcher Stephen Arnold, professor of marketing and retailing at the Queens University School of Business in Kingston. Ont., suggested Wal-Mart’s deliberate visual use of members of its army of some 52,000 largely multicultural store associates in its advertising “goes back to an earlier decision as a way of containing costs. But it turns out it was a big winner in terms of motivating their own associates. Almost by default, it becomes multicultural.”

At the time Wal-Mart did not massage its massive database – neither to help hone its multicultural message or to find out how effective its multicultural marketing has become. “We’ve seen obviously consistent growth in sales, market share, traffic counts and average transactions,” says Puim. “If we hadn’t seen those things move in a more positive way, we would have started researching every piece that we’ve done. But what are we going to research when we see more people in our stores every day?”

The ad campaign was to direct competition at Zellers, Canada’s other low-priced retailer. In 2002, Zeller’s normalized sales and revenues were $4.65 billion, down 0.5% from 2001. Wal-Mart’s sales outside the U.S. reached $40.7 billion in year ending Jan 31, 2003, a hefty 15% increase over the previous year. And operating profit outside the U.S. hit $2 billion, a whopping 55.8% increase.

#1 retailer relies on word-of-mouth vs. traditional advertising to boost sales
In the early ‘90s, much was written about Wal-Mart’s achieving its success while holding the lowest ratio of ad spending to retail sales among its peers. Wal-Mart spent only .5% of every sales dollar on advertising in the U.S., totaling $169M in 1990. “Low expenses enable the company to better serve its customers with low prices,” said Paul Higham, Wal-Mart’s then vice–president of marketing and sales promotion. Advertising Age stated that much of Wal-Mart’s growth was expected to come at the expense of weather competitors, primarily regional chains and local operations.

Even Business Week reported that Americans in the 1990s “are demanding value – not just low prices, not ‘relationships with institutions which deliver little, and false images.’ Real value means products that perform, significant improvements, top service, and good prices. Because this can add production and marketing costs at lower unit prices, the new climate favours lean, efficient organizations, such as Wal-Mart Stores Inc. Value marketing does not necessarily mean low prices; the Japanese are currently marketing expensive cars quite successfully. Tips on becoming a value marketer include: 1) offer products that perform; 2) give more than the customer expects; 3) offer guarantees; 4) avoid unrealistic pricing; 5) give the customer facts; 6) build relationships through meaningful programs.”

Wal-Mart pours ad dollars into network TV
After years of boasting that it relied on word-of-mouth advertising for growth, Wal-Mart Stores was on the verge of becoming a major network-television advertiser as reported in Advertising Age, Jan. 1993. According to LNA/Arbitron Multi-Media Service, Wal-Mart spent $21.8M on network TV in the first 9 months of 1992, nearly triple the amount spent in the same period in 1991.

What the retail giant had going for it, was its knowledge and usage that ad theme enhances reception. In advertising and promotion, a theme may be expressed graphically without a word in support of it. Many advertisements, most ad campaigns, and even political campaigns go better when themes are used. A theme can glue together the varied elements of a single ad, many ads, or pieces in a campaign or package. Themed advertising is accepted more readily than unthemed advertising. Wal-Mart became one of the masters of themed advertising. Using real people (customers and employees) its ads continued to create the style of trusting relationships.

Wal-Mart chairman ponders more ads in newspapers
By the end of 1994, Wal-mart’s local advertising – or lack of it – had generated some ill feeling among some publishers. Wal-Mart chairman and CEO David Glass told a gathering of writers and editors from newspapers in seven states that he “feels there’s an opportunity to do more local advertising and that it was cut back further than it should have been.” Wal-Mart used to drive its business with two or more weekly ads promoting specific prices, Glass said. But when the company switched to an ‘everyday low price’ philosophy a few years ago, it no longer needed the frequent price-specific ads. Glass disputed the point of the recent “Doonesbury” comic strips; depicting Wal-Mart as a huckster moving into small towns and driving out small businesses.

“The state of Missouri, the state of Louisiana, the state of Colorado ... different sates…have very extensive studies that say a Wal-Mart store helps solidify a town into a trade center where the business that’s done after we arrive is significantly greater—increases significantly more that that which we do. You read stories about how towns don’t want Wal-Mart, but in many cases that’s a very few people getting a lot of publicity. And I may have on my desk a petition signed by 15,000 people saying ‘please come, ignore the 100 people who are trying to block the store.’”

In 1994, while CEO to both Wal-Mart and the Kansas City Royals, Glass said the same principles of success hold true in both enterprises. “Good business principles apply in baseball. We don’t have any superstars at Wal-Mart. What made Wal-Mart successful was a lot of ordinary people working hard and working together. You make them partners in your business.”

Putting the license before the brand
Speaking of partnering in business, in the summer of 1995, International Management Group (IMG) created ProMac, a clothing logo design for its newest invention: a license without a specific product. The world’s largest independent licensing agency and seller of televised sporting events intended to use the ProMac trademark for first-look deals that IMG turned down. Even the NFL can’t guarantee that the apparel it permits on the sidelines will automatically get air-time. Selling the signage and being the camera shot-list decision maker at its sporting events, the new concept was important.

“Most people have a brand and grow it by feeding it with sports marketing. We are developing a brand with sports marketing and feeding it with product,” said IMG licensing honcho Rick Isaacson in Brandweek.

Promac had come at a time when licensed sports apparel was losing its fashion cachet and retailers were running the other way, having been burned badly by the baseball strike and hockey lockout. IMG touted it would sell a master apparel license to one of the holy trinity of mass merchandising: Wal-Mart, Kmart or Target. The lure was a unique combination of the margins of a house brand with free national TV exposure. And you can be pretty sure Promac wasn't going on strike.

Well, neither do toys and Christmas.

“Wal-Mart hopes a December cross promotion with Family Channel’s 25 Days of Christmas programming, which will garner $7 million to $10 million in ad support, will spur holiday sales”
This 1997 promotion, combined with Wal-Mart’s seasonally expanded toy section, (dubbed Toyland), gave the discount retailer a month of heavy media to go up against Kmart’s celebrity endorsements and Target’s Snowden character blitz. Wal-Mart would advertise on the Family Channel’s lineup of special holiday programming from Dec. 1 –25. FC’s daily Home & Family property (the live afternoon show that put FC on the map) featured Wal-Mart’s Toyland toys and talk about gift-giving ideas from the retailer. One segment even aired live from Wal-Mart's Los Angeles store.

Wal-Mart promoted the tie-in with POP in the toy department: a constantly running video with highlights of “25 days of Christmas” and 30-second Family Channel spots on the in-store radio. Wal-Mart circulars also flagged the programming. Both parties felt a good fit, given their emphasis on family.

Wal-Mart in-store ads jump
In 2002, Sara Lee and Reckitt Benckiser were among two launched product campaigns via the Wal-Mart TV Network, the mega retailer’s in-store video system which is operated by Premier Retail Network. Upfront buys for the network, which take place Sept/Oct, were up 40% over last year. Earlier in the year, Dial Renuzit and General Mills broke new product ads on the in-store network, which boasted a roster of more than 150 advertisers including Unilever, Gillette and Sony.

Advertisers paid $250,000 for a 30-second ad (including production) to run for four weeks. The cost remained the same in 2002 as in 2001. The Wal-Mart TV Network reached 100 million viewers during the four-week period.

The ads ran on “What’s New @ Wal-Mart,” a program airing 30 - second product spots twice hourly in all 2,400 Wal-Mart divisions one and Supercenter stores. The ads featured a hostess showing the products while discussing their features and benefits.

Wal-Mart, mags pair for ad/content in-store spots
Early 2004, Wal-Mart teamed up with a number of magazines, including hot title Lucky to create a slew of ad-cum-content spots on its in-store TV network, with the aim of inspiring customers to make extra purchases on their trips to the retail behemoth.

Wal-Mart TV Network typically ran 5-to-10 second ads from marketers pushing one of their products. But this new deal will see the network- which gets more than 150 million impressions a month, according to Nielsen Media Research – showing 30-second spots originating in partnership with half a dozen magazines, including Readers Digest Association’s The Family Handyman and Taste of Home; Time Inc.’s Southern Living and Conde Naste Publication’s Lucky. The spots were based around tips and features from the magazines.

One spot shows a cover of Lucky with tips for spring fashion such as layering T-shirts in spring’s hot colour pink, and accenting the outfit with a pair of mules in a different pink shade. Spots from other magazines cover tips on topics from recipes for back-to-school lunches to how to cut grass for a more lush lawn. The Lucky spot ends with a plug for the magazine.

“We’re always looking for an opportunity to spread the word about Lucky,” said Rick Levine, managing editor. Wal-Mart customers buy 16% to 17% of single copies month after month.

Bonnie Bachar, general manager-North American Publishers Group, Readers Digest said tips for the spots stem from The Family Handyman’s most popular feature, “Handy Hints,” such as tying a piece of wire across a paint can to prevent paint brush drips. She compared the spots to a movie preview and sees Wal-Mart TV as a way to increase single-copy sales as well as a branding opportunity. Eventually, Bachar said, she hoped the spots would be used for specific product tie-ins.

Caution! Floss ahead and other signage
Repeatedly, time-pressed shoppers prove extremely receptive to Wal-Mart’s efforts. One said “It may sound crazy… but in my day every minute counts… so if there’s a little sign that shows me exactly where the dental floss is and that saves me two or three minutes, I think that’s great… It saves me the frustration of trying to find what I’m shopping for.”

The mega-retailer conducted a company-wide study, The Customer Understanding Project, in an effort to get to know customers better. Wal-Mart Canada took the project a step further and with its agency, Publicis Canada, launched an in-depth study into how customers navigate its stores.

Wal-Mart’s first round of research involved one hour shop-along videotaped interviews with 20 recruited female customers from a variety of demographics. Generally, customers thought overall signage could be improved by better placement, less clutter, moving signs to eye-level and designing them so they stand out.

Wal-Mart made the changes and Publicis conducted follow-up research, again involving one hour shop-along interviews. Customers said they were aware of the new signs (noting that they were different from other Wal-Mart stores) and found them relevant and practical.

The new signs made navigating easier, shoppers relied less on staff, it made shopping more efficient and it improved overall perception of the store’s quality.The changes were implemented nationwide as new stores opened. By the end of 2004, about 35 new stores would be outfitted with the improved signage. In addition, existing stores will be updated as renovations take place.

Going back-to-school via Wal-Mart’s golden rules
Wal-Mart’s 2004 summer campaign touted the back-to-school season with a low-price message targeting moms via print ads running in parenting publications, including Parents, Parenting, Family Fun and Child. The TV spot also speaks to mom and continues the school supply theme, focusing on Wal-Mart as the place for affordable back-to-school supplies.

Print shows a sheet of notebook paper with the words, “I will not pay too much for school supplies this year,” on each line along with a small shot of a Wal-Mart customer named Lorenzo and the continuing tag, “Wal-Mart. Always low prices. Always.”

“The majority of people who went through a school system have suffered the hand-cramping punishment of writing sentences in class, whether it was for talking too much or passing notes, or whatever,” said Eric Knittel, copywriter at Bernstein-Rein. “We hit on that and thought it would be a great use of the medium, and a creative way to talk price with mom, too. Wal-Mart loved the idea. When you have an ad that touts your message more than 20 times, what’s not to like?”

The TV spot speaks to moms and focuses on Wal-Mart as the place for affordable back-to-school supplies. The spot follows the formula of using real people and employees that Bernstein-Rein originated for the mass merchandiser in 1985.

“[The print] is something we’re trying for back-to-school; I don’t know how consistent we will be with it,” said Kelli Anstine, VP/Associate Media Director at BR. “It’s really about framing young moms in the places where she is touching base with different media.”

Today’s Wal-Mart nation?
Its size, power, and low prices have helped make Wal-Mart an American success story and to some employees, WM is family. Adeyemi Adeduro, an 18-year-old Georgia native, has been coming to Wal-Mart since he was 8. The teen works as a cashier and sales clerk at the Roswell Wal-Mart, earning money for college while his mother is a department manager. Both consider Wal-Mart family.

Obviously, not everyone feels the love. Just what is it about Wal-Mart that makes people fearful? Well, for one thing, Wal-Mart is no longer just a store, but a force to be reckoned with. Consider the DNA of Wal-Mart:

1.2 million workers
$256 billion in sales (more than any other company including GM and ExxonMobil) 2.3% of the GNP in 2002
gas and grocery sales, along with $3,000 plasma TVs and $1,000 diamond jewelry
approximately 3,600 stores and warehouse clubs stretching from Maine to Alaska, Great Britain, Mexico, and Chinathe nation’s largest private employer.

Wal-Mart’s reach extends to its suppliers who must operate efficiently to sell their wares to Wal-Mart at the lowest possible prices. Wal-Mart influence is certainly felt in competitor’s aisles: toy sellers, electronics dealers and music vendors are just some of the retailers whose fortunes have been affected by Wal-Mart.

The company says its low prices help people afford what they might otherwise not be able to buy, and some economists believe that Wal-Mart has itself helped hold down the nation’s inflation rate. But is there a cost to Wal-Mart’s relentless focus on low prices?

Labour unions have attacked the company for discouraging workers from unionizing and demanding better pay, and a recent class-action lawsuit contends that women are not promoted to management positions as frequently as men. Other lawsuits content that Wal-Mart sub-contractors hired illegal immigrants to clean the stores, and that hourly workers were pressured to work overtime without pay. And in the past, Wal-Mart has been found to have sold goods made by child laborers in sweatshops in China and other places overseas.

Wal-Mart, to many, has become not just a chain, but a chain of exploitation.

In its early years, Wal-Mart concentrated on rural areas of the United States, catering to shoppers overlooked by other stores. Wal-Mart’s tremendous growth can be attributed to many factors. From the beginning, it focused on price and on figuring out what consumers really wanted to buy, continuously tracking prices and selection at competing stores and usually trying to meet or beat them.

Wal-Mart was also early to recognize the value of technology in helping it manage all that data. Today, handheld computers and advanced software help monitor the comings and goings of inventory in its warehouses. Sales data from every store go back to company headquarters in Bentonville, Ark. And each store’s merchandise is carefully selected after researching an area’s demographics: what shoppers earn, eat, play and watch. Such close product control also helps keep costs down.

Wal-Mart’s best-selling item? You guessed it. Bananas.

Samuel R. Walton, Wal-Mart’s founder, started out as a clerk at J.C. Penney. He opened the first Wal-Mart a small, unassuming store – in Rogers, Ark. in 1962. Years later, even when he was worth billions, Walton, known as “Mr. Sam,” wore plaid shirts to work and drove a battered pick-up truck.

Although Walton died in 1993, his legacy remains. Visitors to Wal-Mart’s corporate offices in Bentonville are struck by the no-frills atmosphere, from the linoleum that covers the floors to the macaroni and cheese served in the cafeteria.

Suppliers – who include most of the biggest names in electronics, entertainment, packaged food, apparel, and jewelry – speak admiringly but often wincingly of Wal-Mart’s emphasis on getting their products at the lowest possible price. Wal-Mart contends that whatever savings it ekes out from suppliers are passed along to shoppers.

Many media companies now create special editions of movies, CDs, and magazines tailored to the sensibilities of Wal-Mart and its customers.

In some parts of the country, opposition to Wal-Mart has intensified in recent years. A company-sponsored referendum earlier this year in Inglewood, Calif., asked voters whether they wanted a Wal-Mart built in their town. The answer came back: no. Recent efforts to build stores in Chicago, New Orleans, and Dallas have also been defeated or delayed by community opposition.

Wal-Mart has come a long way since Sam Walton opened his first store in Rogers, Ark., in 1962. By the end of 2003, there were 2,551 Wal-Mart stores in the U.S., including discount stores, supercenters, Sam’s Clubs, and neighbourhood markets. Wal-Mart expects to have 43 stores in China in 2005. With close to 200 stores in California and 400 in Texas, can you guess how many Wal-Marts are in Washington D.C. and New York City?

Zero.

Wal-mart's social sensibility
Carrying entertainment products is a modern-day cornerstone for Wal-Mart, who has refused to sell three men’s magazines (citing customer preference) and literally covers up the headlines of a number of women’s magazines at the checkout aisle (based on worries that the words offend). Some critics site Wal-Mart for interfering with free speech; Wal-Mart defends its moves as "business decisions the company has a right to make.”

Reshaping the image of its refusal to carry certain media products has given the discounter additional clout with music and film producers and publishers. Many now create special editions of CDs, movies, and magazines tailored to the conservative sensibilities of Wal-Mart and its customers.

Wal-Mart doesn’t ignore public concerns and the negative publicity it sometimes gets. In 2002, the company began a process of self-examination that included hiring an image consultant and paying for television ads that emphasize job opportunities and other benefits of working or shopping at Wal-Mart.

CEO H. Lee Scott Jr. has been explaining the shift in the company’s strategy to various audiences this year: “We have not gotten the story out to the extent that we need to get our story out.”

Al Norman, the founder of Sprawl-Busters, (a citizen's group that helps stop unwanted development and considered to be "Wal-Mart's #1 enemy" according to Forbes), sees the company’s recent advertising as a litmus test. “You don’t see the smiley-face rollback guy as much anymore,” he says. “You see these feel-good ads. They are having to completely re-adjust the way they talk to the public.”

Long-term benefits. Others say that complaints against Wal-Mart have a flip side. If companies doing business with or alongside Wal-Mart are forced to cut costs and improve efficiency, isn’t that good for consumers and the economy in general? Some experts say yes – the American economy contains lots of fat and anything that trims it is beneficial in the long run.

Former Labor Secretary Robert B. Reich has called Wal-Mart “the logical end point and the future of the economy in a society whose pre-eminent value is getting the best deal.” Others say it benefits low-income Americans in particular by putting downward pressure on prices, especially on the basic items that tend to consume a larger portion of the incomes of low-income people.

What is clear is that Wal-Mart’s power really does stem from its popularity with shoppers. Company executives often point out that if there were no customers, there would be no Wal-Mart.

Like any mega-success, it's also true that as Wal-Mart has grown, its business has become increasingly complex. “Over the years, we have thought that we could sit in Bentonville, take care of customers, take care of associates, and the world would leave us alone,” Scott told a group of Wall Street analysts in September 2004. “It just does not work that way anymore.”

Wal-Martainment, it works
Remember that in-store TV network Wal-Mart launched in 1997 to pitch products and entertain shoppers? Do people really watch TV while they shop? A new AC Nielsen study says Wal-Mart customers are watching seven minutes of TV while shopping, up from five minutes in 2002. Brand recall was even more surprising – 65%, compared with 23% for products advertised on TV. Having installed 100,000 TVs in 2,620 stores, Wal-Mart is rolling out new plasma and LCD models – some at eye level for “Can’t miss” advertising.

The creator of all this "stuff" advertising is Premier Retail Networks (PRN), the in-store media network for the world's largest retailers. PRN customizes entertainment, news and product PR so that Wal-Mart TV differs from the PRN network showing at a Best Buy or a Sears. Shoppers at Wal-Mart have watched everything from a Britney Spears concert to Fox News coverage of the 2004 election, with 12 minutes of ads per hour. Advertisers pay from $50,000 to $300,000 for four weeks of exposure, but the payoff at Wal-Mart is an audience estimated at 138 million weekly – all of them already off the couch and in the store.

Image efforts cut into Wal-Mart sales
Sam Walton seldom diverted his focus from what kept his flock flocking to stores – the “We Sell for Less” philosophy plastered out front. But beset by a rising tide of bad publicity that intensified just over a year ago, in late 2003 ranging from a class-action lawsuit charging sex discrimination to exposes on Wal-Mart’s use of illegal aliens and other labour practices, the retailer shifted much of its ad budget into image advertising.

It may be good for PR, but it takes focus off low prices.If you've seen any Wal-Mart ad from the past year you were more likely to see a heart-tugging commercial about how the world’s largest retailer is rebuilding blighted urban communities, advancing minority employees or granting wishes to terminally ill children rather than a smiley-faced pitch about low prices.

Walk into a Wal-Mart store, and you’ll see giant banners proclaiming a commitment to “Wal-Mart Good Works” before you see the first “Rollback” placard.

This is marketing from the "Book of James," as in the Bible’s broadside against faith without works rather than the "Book of Sam," as in Walton legendary “Mr. Sam” to the Wal-Mart nation.

In a mid-course correction, Wal-Mart stores shifted more of its ad budget back to traditional price-focused advertising last week after a disappointing November, rolling out more deep discounts, buying rare (for Wal-Mart) run-of-press newspaper ads to highlight them, and boosting the frequency of the long-running “Always Low Prices” TV ads. Omnicom Group GSD&M, Austin, handles the campaigns.

Yet the corporate image advertising remains – as do the reasons for it. The trouble is, soft and fuzzy ads or no, Wal-Mart actually has moved up a notch this year to become the No. 1 corporate target of negative online buzz concerning employment practices, according to Pete Blackshaw, chief marketing officer of Intelliseek, which tracks what consumers say about brands in online message boards, blogs and other forums.

Wal-Mart’s negative ratings from consumers for shopping experience didn’t improve, either, in the past year and remained well behind that of Target. The biggest area on online consumer complaints against Wal-Mart, Mr. Blackshaw said was “staff attitude,” which he speculated may have a link to the employment practices issues.

When you feel good, your life is good
After a series of PR mishaps, Wal-Mart shifted advertising toward emotional efforts.

“Unfortunately, you can’t really beat negative PR with advertising,” says Laura Ries, president of the marketing consultancy Ries & Ries. “Negative PR will win every time. They hadn’t done that much [image] advertising before the negative PR hit, so they were in a quandary … It’s always best to focus on your core asset, which is “Always Low Prices.”

Strong Competition
Still, she doesn’t blame any shift in ad strategy for Wal-Mart’s slowing sales growth. “I think Target’s just a very strong competitor. I think the cheap chic positioning has done a number on Wal-Mart and people are choosing that shopping experience.”

But Paul Higham, former chief marketing officer at Wal-Mart as well as a former Target executive, who now runs the consulting firm Question Factor, downplays the ad shift and any negative impact on Wal-Mart. “They’ve always done [image advertising],” he said, adding that he believes much of it is for the benefit of Wal-Mart’s own million-strong workforce and their morale.

As for the recent slowing in sales growth, Higham's research of Wal-Mart stores in early Dec. 2004 indicated a strong rebound. Higham suggested "it will all be forgotten and people will be talking about Wal-Mart having another great year.”

Interview with a Wal-Mart advertising executive

Does Wal-Mart’s current advertising reflect its brand? Depends which ads you’re watching. And who you ask. Rick Hill has been at Bernstein-Rein Advertising for 6 years and as an Account Supervisor for same on the Wal-Mart account. I asked him about the retailer’s branding.

DOBI: What do you do?
HILL: My role is as a production manager, I keep track of all things Wal-Mart. I act as a conduit to and from the client and our agency. Wal-Mart pretty much makes all the decisions. My earliest knowledge of Wal-Mart’s campaigns was with the Smiley Face. Wal-Mart has always had the tag: “Always low prices. Always.” Then Rollback was introduced.

DOBI: How would you describe Wal-Mart’s brand?
HILL: We sell for less.DOBI: How would you describe Wal-Mart’s company category?HILL: We have a few: We’re a discount retailer and we’re a supercenter format – a discount store with groceries.

DOBI: How does Wal-Mart use its branding in its advertising?
HILL: Across all advertising we always talk about Wal-Mart’s USP: 'We sell for less.' The real people campaign was before Smiley. Our decision to use this campaign was to re-enforce brand. Brand is the idea of trust. Wal-Mart’s customers can trust that they can buy what they want when they want it for less. The origins of Smiley are we were trying to find a fun way to capture rollback. Because Wal-Mart doesn’t have sales. They do rollback prices … We’ve always done the same things … continue to use real people.

Wal-Mart supports many areas of the store. Bernstein-Rein is responsible for Wal-Mart’s general market advertising. WM also has diversity agencies. We support Wal-Mart’s price message – supercenter format, corporate reputation, new releases in home electronics and movies.

Key message = always low prices: advantage of supercenter = groceries and general merchandise together in the same basket.

From a corporate perspective, Wal-Marts are a benefit to the community in which they operate. Wal-Marts give to local charities, they create jobs, raise the tax base which supports school, fire and other municipal and local government departments, offers low prices. Corporate uses the same ad vehicles as general merchandise and supercenter stores: TV, radio, print, internet and outdoor.

Our Los Angeles Baldwin Hills store is a unique experience. We recently filmed a commercial there. It’s the first time we took an existing building – as a way to move into the neighbourhood – rather than build our own.

DOBI: What’s happening with Wal-Mart now with all the news hoopla?
HILL: Not in a position to answer that – all of advertising is created to help fulfill Wal-Mart’s marketing adjectives. Our newest ad campaign (Feb. 2005) is price and item advertising where we show a product and give its price. This meets our brand “We sell for less.”

DOBI: What do you love most about working on the Wal-Mart account?
HILL: It’s the best opportunity anyone could ever ask for variety.

What’s in a brand?
A brand is the emotions a product emotes and evokes. With a root cause being the behavior: of the product, its company owners, and employees. Is Wal-Mart’s advertising on brand? Well, I believe Sam Walton would still be wearing plaid shirts and driving a battered pick-up truck if he were alive today. Does Wal-Mart continue to sell for less in its advertising? Sure it does. Has it brought some new ads into the mix, nixing the "sell for less" message? Yes. And what I see is advertising that emotes and evokes the nature of Sam. Especially these latest ads that name a product and a price.

Besides, are we really here to agree or disagree with each other? Or to understand one another? Sam was a man who knew himself; he knew precisely what he stood for; he knew exactly what he wanted to achieve; and he knew how to say what he wanted his customers to know about his business promise.

And Wal-Mart continues to make good on it.

Ask most employees of any American company, “Say! What’s your brand?” The answer is a resounding “I dunno.”

Most companies can't even articulate one.