WAL-MART CUTS COSTS, OUTSOURCES PROMOTIONAL EVENTS

CHRISTINE BLANK

BENTONVILLE, Ark. -- Wal-Mart Stores here is effectively reducing promotion costs by outsourcing in-store and grand opening events.

Although not all events are outsourced, Mass Connections, La Mirada, Calif., has staged hundreds of events since April for the retailer, including fashion shows and barbecues. Mass Connections calls these programs "retail-tainment."

"The program alleviates most of the corporate management previously required to run the in-house program," said a source close to the program. "It has allowed Wal-Mart to focus on its core competency of being a retailer."

In addition, participating manufacturers can acquire reporting and program results "not previously available" with Wal-Mart's in-house program, she said. Wal-Mart did not respond to calls for comment.

Wal-Mart's Grilling Event, which ran in May in about 1,500 stores, featured 15 suppliers' products that tied into the barbecue/picnic theme. Among the sponsors: Frito-Lay, Dr. Pepper/Seven Up, SC Johnson and EJ Gallo. Along with food samples, the event featured product demonstrations on children's insect repellent and a stain remover, as well as handouts of a cookout checklist and recipe cards.

Fashion shows have been one of the most popular events to promote store openings or emphasize Wal-Mart's clothing offerings. Fifteen clothing manufacturers and five consumer products manufacturers, including Jordache and Procter & Gamble Cosmetics, contributed to the free "goodie bags" for shoppers watching the fashion shows.

To date, about 20,000 consumers have stopped to watch the shows and pick up the free bags, the source said. "Clothing sales have also been strong. Manufacturers that are participating this year have already signed on to participate in 2001," she added.

The events also can boost employee morale because store associates are used as models in the fashion show, as they are in Wal-Mart circulars, she noted.

Another event, held in all 2,600 Wal-Mart stores, received attention from the Today television show. The Dubble Bubble children's bubble gum blowing contest awarded monetary prizes to national winners, and funneled donations to the Children's Miracle Network.

To promote its cosmetics department, Wal-Mart also held several makeover events, which run in concert with store openings and re-openings. Three cosmetic brands are featured in a "department store type of experience," the source said, in which trained makeup artists offer makeovers to consumers. In addition to cosmetic tips, the shoppers receive product samples.

The brands sponsoring these events vary. "The demographics, program goal, event timing and manufacturer budget drive which brands participate," the source said.

In the near future, Mass Connections and Wal-Mart will hold six new types of events, but the companies declined to discuss details.