Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News
Sponsored By
Ad Agency Report Enumerates Wal-Mart's Limitations
Wal-Mart Stores here needs to revive its brand image by repositioning itself to highlight how smart its shoppers are and how they can use Wal-Mart as a resource to live better lives, the company's former advertising agency said in a report to management last fall. According to the report, a copy of which was obtained by SN, consumers do not perceive Wal-Mart as a smart choice in
Elliot Zwiebach
June 4, 2007
5 Min Read
ELLIOT ZWIEBACH
BENTONVILLE, Ark. — Wal-Mart Stores here needs to revive its brand image by repositioning itself to highlight how smart its shoppers are and how they can use Wal-Mart as a resource to live better lives, the company's former advertising agency said in a report to management last fall.
According to the report, a copy of which was obtained by SN, consumers do not perceive Wal-Mart as a smart choice in several priority categories, including grocery, “where saving money and time are not the be-all, end-all drivers.”
The report was prepared by GSD&M, Wal-Mart's ad agency for more than 30 years, as part of an unsuccessful effort to be re-hired. The 55-page report was based on focus groups and one-on-one interviews.
In the report, GSD&M pointed to several “real, and not insignificant, challenges facing the brand” that it said Wal-Mart needs to overcome “[to] give people very real and compelling reasons, beyond price and convenience, why we are the smart choice in the departments we intend to grow.
“By studying how people make buying decisions and identifying points of frustration in the buying process, we can identify positioning opportunities for Wal-Mart to become the ‘smart choice’ within any given category,” the report says.
“The Wal-Mart brand was not built to inspire people while they shop, hold their hand while they make a high-risk decision or show them how to pull things together.
“The truth is, our shoppers do not believe [Wal-Mart] is the smartest choice in the categories we need to grow” — including electronics, apparel, home decor, pharmacy and grocery. “In fact, some of our core equities work against us.”
Among the perceived challenges noted in the report:
“People want the lowest price but they don't always trust the lowest price, especially when there is no brand name to provide assurance. Our low prices actually suggest low quality.”
“Wal-Mart is the easiest place to do all of your shopping and the most inconvenient place to do some of your shopping.”
“People don't go to Wal-Mart to shop — they go to buy things as quickly as possible. Wal-Mart has never been designed to inspire browsing and ideating.”
“Part of the beauty of Wal-Mart is knowing they'll have something for everyone on your list. But when you're buying something special for your home or your wardrobe, you don't want something for everyone — you want something for you.”
“Do-it-yourself is just fine when you're picking out toothpaste, but it isn't sufficient for picking out linens or high-dollar electronic items.”
The report said 67% of those surveyed said Wal-Mart is the discount store they shop most often, compared with 27% who cited Target. “While this number is very strong, we have seen declines over the past two years, when this score hovered in the mid-70s range,” the report said.
The report also noted that 43% of all shopping occasions involved grocery purchases.
PRICE FIRST AND FOREMOST
According to the report, low price is as relevant today as it ever was. “Price is the first and most fundamental reason why it's smart to shop at Wal-Mart,” it said.
“By saving people time, money, energy, stress and, to some extent, saving communities by offering resources, shopping at Wal-Mart truly does contribute to a better life. People had very little problem laddering up to the higher-order benefits of low prices and one-stop shopping. This is the imagery the brand must ultimately be associated with.
“We must restore pride in the brand by showcasing the savviness of our customer and the substance of the brand in helping people live better lives.
“So what's the problem?” the report asks. “When is Wal-Mart not smart, and how are we not helping people live better?”
In answer to those questions, the agency cited 10 challenges Wal-Mart faces:
Its corporate reputation as “a highly politicized brand — the brand portrayed in the media as a bad corporate citizen who doesn't treat employees well and isn't acting as a good citizen of the planet. That brand is increasingly casting doubts on the consumer brand that people know and love.
“The argument is that the economic value Wal-Mart brings to the market is seen as coming at the cost of societal values, community values and environmental values.”
The stereotype of Wal-Mart customers as hillbillies who are not very smart, which is problematical as Wal-Mart tries to move into more style-oriented categories like apparel and home, the report pointed out.
A more positive consumer perception of Target. “[But] if Target is about design and style — ultimately superficial attributes — Wal-Mart can be about meaning and substance,” the agency noted. “Rather than objectifying our products and putting them on pedestals, Wal-Mart can celebrate our products in the context of people's lives.”
The perception Wal-Mart is not the smartest choice in the categories in which it hopes to grow. In groceries, for example, the report said a local grocery store is perceived as the smart choice for perishables “because the quality of the perishable takes priority over price.”
The agency suggested Wal-Mart must use “identifying positioning opportunities” to give people compelling reasons, beyond price and convenience, why it is the smart choice.
The low-price paradox, where people want the lowest price but don't trust the lowest price because of low-quality perceptions.
The inconveniences of shopping at a big-box store like Wal-Mart.
Zero-time shopping, which works on products people don't spend more than a few seconds thinking about but not on electronics, home decor or apparel, which require slow-time environment, the report said.
Moving away from the idea the stores have something for everyone and focusing on letting shoppers feel Wal-Mart understands their particular needs and preferences.
The lack of service in selected categories, which can be overcome by developing resources that empower shoppers with knowledge to make informed decisions on their own.
The perception Wal-Mart is the place to go for basics, which can be overcome by expanding what “basic” means, the agency suggested. “People will trust us for ‘basics’ long before they trust us for ‘specialty.’ By repositioning what we as merchandisers think of as specialty items as the ‘new basics,’ we address the market from a position of strength.”
About the Author
You May Also Like
