Wal-Mart Commits to Touchy-Feely Changes
March 20, 2006-- Home Textiles Today,
“Save More, Smile More,” one of the Wal-Mart's advertising mantras, rolls off the tongue like the slogan of a certain upscale competitor, “Expect More. Pay Less.”
But Wal-Mart's new campaign, “Beyond the Basics,” easily evokes images of the softer side of Wal-Mart.
For the fist time recognizing itself as a brand, Wal-Mart is hard-selling that new image to everyone who will — or must — listen. And, while the store-as-brand marketing trend is nothing particularly new, Wal-Mart's embrace of it is.
“We're going to leverage our global expertise to reinvent our worldwide businesses,” Carol Schumacher, Wal-Mart's vp investor relations, said at a recent conference. “What this really means is that we're going to be working at being relevant to a broader customer base around the world, but there's no place more important for that to happen than the United States.”
The company's new merchandising and marketing campaign, outlined at the Bear Stearns 12th Annual Retail, Restaurants and Consumer Conference, makes it crystal clear that it wants to move beyond its “loyalist” customer and pay greater attention to pulling the “selective” shopper who is in the store mainly to pick up consumables.
Wal-Mart also wants more of the 62% of consumers Retail Forward estimates have not shopped at a Wal-Mart in the last week (38 % have). It wants more of the 34% who haven't shopped there in the past month (66% have). And it wants to “influence” the other 9% — the “skeptics” who say they never, ever shop at a Wal-Mart (91% do).
Shoppers don't go to Wal-Mart for the ambiance, Retail Forward confirmed. It enjoys a 36-point lead over the rest of the retail world (59% compared to 23%) when it comes to consumers choosing a store for better prices. But when it comes to the experience (4%) or the perception of better quality goods (4%), it lags other retailers by 13% and 16%, respectively. Clearly, there's a lot of work to be done.
So Wal-Mart's effort to step up and attract a broader base of higher-spending customers will translate into becoming a solutions provider rather than an item merchant — the very strength that brought it to retail dominance.
In home particularly, offering “room solutions” will layer soft home with accessories and furniture. In doing so, the retailer will assist in reducing its time-pressed customers' stress levels with a cleaner, simpler experience, said Stephen Quinn, Wal-Mart's new senior vp marketing. That will also result in selectively editing assortments across the store.
“I went in for a light bulb … and found a new way to brighten the room,” offered one of the new Beyond the Basics solutions ads. “I went in for a lipstick … and found a whole new look,” offered another, showing a dressed bed.
As Wal-Mart looks to upgrade its stores, it may also alter its branding to attract these targeted market segments. During questions, Quinn left open the door to a new Wal-Mart brand — a new, perhaps upmarket, store format in the future.
Buying the farm
While home features prominently in the upscaling mix (see HTT, March 6, page 1), Wal-Mart will press even harder into organic foods, adding 400 “superior” SKUs in coming weeks, while substantially upgrading apparel, moving beyond even Metro 7, its still-new line of more fashionable, better quality lifestyle goods.
“We actually purchased an entire farm crop of organic cotton,” Quinn noted. “And we're going to pass those savings on to the customer and make organic baby clothes available this June.
Overall, Wal-Mart's changes will translate from being just an EDLP experience into one that offers a broader value experience, said Quinn, ushering in a sea change in the merchant's position from the day of its founding 45 years ago. It will focus on clarity instead of clutter, editing its assortments to be more relevant, moving to a stronger position in recognized brands and personalizing the shopping experience for its customers.
Some of that will flow through what Quinn called “mass luxury,” a term generally coming into much broader use.
“People are looking for a deeper emotional need from the things that they buy,” said Quinn, who joined Wal-Mart six months ago after 13 years with PepsiCo. “People are buying things in a way to reflect their own self image and it's important that Wal-Mart offer the variety and the quality of merchandise the customers are looking for in order to fill that emotional need as well.”
The changes will be powered by four broad shifts in the way the company does business:
“We will have a much greater consumer and customer focus,” with more fashionable, higher quality merchandise at Wal-Mart prices.
“We will have much better brand discipline, overall. We're going to deliver a much more consistent and integrated brand message” across all channels, including in-store signing.
“We will, third, develop new capabilities,” ranging from technologies to “talent development … we're going to make sure that Wal-Mart remains on the leading edge in the retail industry.”
“We will have much better execution … to make sure we can execute that brand experience in a way that is consistent and compelling for the customer” by managing all key brand touch points.
He said the retail environment has morphed into one of customer control in which “demographics are destiny.” The company cannot act as though one size fits all. While acknowledging the impact of an aging population, Quinn highlighted that 30% of the U.S. population is non-white and growing faster than the average overall. And he also identified Echo Boomers — now ascending to their own economic power — as the “customers of the future.”
In the process Wal-Mart plans to move from being a “friendly” store to one with a higher service environment, offering knowledgeable assistance.
“We know,” he said, “that convenience goes well beyond one-stop shopping.”
Related Content By Author
DayThree from the NY Textiles Market