Wal-Mart Continues Traffic Push
July 25, 2005,
Bentonville, Ark. — Wal-Mart is revamping its marketing strategy, with changes in advertising and branding already in place for the back-to-school season and beyond, as part of the retailer's quest to increase customer traffic and transactions.
John Fleming, who two months ago was appointed Wal-Mart's executive vice president and chief marketing officer, said his objective over the next six months is to increase the frequency of customer visits “and at the same time, and more importantly, drive cross-category purchasing.”
One of the biggest challenges to face, he said, is to coordinate merchandise across different product categories. “But I'll be focused on coordinating our merchants to make sure we can tell these stories,” he said.
The company is also testing several new strategies over the next six months and into 2006, such as localizing television campaigns, leveraging its Web site for marketing and gathering consumer intelligence, and issuing direct mail.
“We've become pretty one dimensional on how we talk to our customers — we have a national TV campaign and a Sunday circular once a month,” he said. “That is 90 percent of what customers see. Yet, every trend in marketing is going away from that. We see an opportunity to drive clever and more direct messages.”
He explained that while business is admittedly going “pretty well” for the company, “consumers' wants and needs are changing dramatically, and prices alone cannot sustain the kind of growth we want and expect. Experience is becoming part of the overall value equation. And it is becoming clearer and clearer that the customer is in control.”
New advertising initiatives include several back-to-school campaigns with a more focused “and more interesting and somewhat humorous approach. We're focusing on key brands and great prices, but we're having fun with the message,” he said.
Hoping to bank on what Wal-Mart has identified as a movement of kids buying dorm furnishings, the company has also developed another related campaign it will localize with heavier circulation in college towns and cities.
Also in the works under the new marketing strategy is better brand development for Wal-Mart, which Fleming said is a retailer already known for offering low prices, a broad assortment and consumer trust, but that has the potential to “become more. We want to move to a brand model.”
The next six months will also see revamped in-store visuals and signage. And into 2006, new marketing plans are already under way, Fleming said, that are intended to have a direct impact on driving growth.
“We are in a whole bunch of businesses where we own 30 and 40 percent market share, but we also have some undeveloped businesses,” Fleming said. “The way to grow the business is not necessarily to get 10 percent more traffic … but to get more people to buy more stuff.”
He explained that customers have visibility of both pricing and product information, particularly via the Internet. “We need to accept that they have choices, and that they are in control and are making their own decisions,” Fleming said.
Another hurdle: Wal-Mart's competitors are, “very focused, very specialized, and above all, very, very good. There are many challenges and opportunities for us to get better.”