When you get right down to it, everything — and nothing — has changed about Walmart in the 50 years since Sam Walton built his first store. Stephen Quinn, Walmart’s marketing chief, appears determined to keep it that way.
“What we’re really selling to people,” says Stephen, “is that they can count on us for their everyday needs at the lowest price. Keeping that interesting is tricky because it will be the same promise three years from now.”
It was also the same promise 50 years ago, which is why Stephen drew on something Sam Walton said a long time ago to arrive at Walmart’s modern-day tagline: “Save Money. Live Better.”
“Sam Walton talked about how Walmart would help the world save money and have a better life,” says Stephen. “We had reams of research and tested all these different taglines and then we just looked at what he had said and thought, hey, that’s pretty good.”
Living up to that deeply rooted principle is very much at the heart of Walmart’s past, present and future. Stephen is convinced that Walmart’s growth depends on “keeping that promise to more people.”
Such fidelity to the past requires changing with the times, too. It means navigating the vagaries of today’s fragile economy while pioneering the frontiers of social media and the newly empowered shopper.
These and other realities has Walmart launching a Facebook page for each of its more than 3,500 US stores, as well as tweaking the role of its famous greeters and communicating “low prices” in new ways.
It also has Walmart realigning its merchandising and marketing operations, so it can better integrate the two and keep the focus where Sam Walton always said it must be — on the shopper.
What is the most important thing to understand about Walmart’s shoppers today?
I’d love for this to sound like a great insight, but the recession — and, frankly, technology — has caused a greater portion of the American public to become very price-sensitive. They have a lot of concerns about the nation’s finances, and of their own household finances as a coincident factor.
We also have a bifurcating economy — a barbell economy — an economy that’s moving in two directions at once. We’ve got a big group of people in America for whom this recession has never ended. We have another group that is doing okay, but is still concerned because of the economy.
Demographers would say this has been in place for a long time, but this recession has really brought it to light. That’s where we’re sitting today. In the same stores where we have a huge private-label penetration, we’re also selling 72-inch televisions. It’s challenging.
What is your view of marketing at Walmart?
Marketing is the voice of the customer at Walmart. It starts with customer insights and falls all the way through to aligning our whole business system against our customer objectives. It then plays a part in the communication of our brand to customers. And then repeat.
Is that any different now that marketing reports to merchandising?
It’s not that merchandising is taking over marketing, per se. It’s that there’s a leader in Duncan Mac Naughton who can put the entire demand equation together because he has access to the merchandising and the marketing side of his responsibility. So, it’s really more about an alignment of our demand plans.
Much of the impact that we, in marketing, are going to have will be to ensure that our merchandising is focused on customer objectives throughout everything that we do. I’m now in a position where I can really influence that from the inside out.
How do you get at the insights that best serve your shoppers?
The best way is to use a combination of our own point-of-sale data and information from our associates, who are on the front line of our knowledge of what happens day in and day out with our customers.
Like other retailers, we are blessed in that we’ve got so much day-to-day, personal interaction with customers. In fact, our associates are very much like our own customers and are our best customers.
They really do know what’s working, what we need to be doing more of, and how to serve our customers better. Sam Walton understood that. Years ago, he used to talk about how it’s so important to listen to the front line of our organization because they really do know what’s going on with our customers.
We obviously enhance that with traditional, segmentation-type market research. We’ve gotten back into the game with IRI and Nielsen, and that’s providing us with a new level of information. Increasingly, the social-media phenomenon that we dove into head-first is providing more interaction and feedback with customers and additional insight as to what’s going on in our stores and in the marketplace.
How much of the insight is data-driven versus gut instinct?
There’s always an element of data involved. In marketing, the so-called “gut-feel” is more data-driven than many people might realize. But in merchandising, which is enormous and where you’ve got individual buyers — and in our case maybe 1,000 people — they have to place bets. They have to listen to vendor after vendor talk about what they think the trends are in their category and what’s going to be trending with customers. Then they have to make a decision.
It’s almost impossible to have a robust enough market-research process that would provide every one of those buyers with the kind of data they would need to make those day-to-day or week-to-week calls.Retail will always have an element of inspiration — based on what works and what doesn’t work — and an understanding of where the customer is headed.
What is the biggest challenge in creating the ideal shopping experience?
In retail, the greatest challenge is that if you take a week off, things start to go downhill. Retail has a way of disorganizing itself if it’s left alone. I mean, people come in our stores and empty our shelves and move things around. So, if somebody is not running around behind customers and putting it back together, it starts to become a bad experience.
How has the shopping experience improved at Walmart?
We’ve provided greater density in the stores, a feeling of exciting and new merchandise, along with great values being highlighted to the customer so that they are easily accessible.
How do you strike a balance between density and accessibility?
The argument would be that we went too far down the road toward cleaning up and simplifying our stores. But we cannot go too far in the other direction, where too much density becomes a hindrance to being effective and productive when you’re in a Walmart. Our customers expect to be productive in our stores.
How is Walmart innovating to better serve its shoppers?
Some of the innovations that are emerging have been developing for a while. I’ve talked about social, local, mobile — so-lo-mo — which are becoming important in serving customers. Walmart has more than 11 million Facebook fans and it’s growing by about a million a month right now.
That is a two-way conversation that we have to have, at scale. What’s happening is that there are a lot of things about our stores, our merchandise and our prices that customers are responding to and we’re responding back to them. Not only is it a great way to learn what is really happening out there, but it’s also changing the experience for people in the stores.
Increasingly, as we activate things with local, store-level Facebook pages, the expectation is that customers can have a conversation with individual stores — in fact their store. Many times what people really care about is their store. They’re not necessarily thinking about Walmart Corporation. It’s: what’s going on in my store, #5260?
You’ve made some changes with the famous Walmart greeter.
Moving the greeters by 10 or 15 feet inside our stores allows us not only to greet the customers, but also gives them the opportunity to help our customers find what they’re looking for and talk about the merchandise.
Increasingly, you’re going to see technology aiding that. We’re already seeing that with our Facebook fans who are conversing with us, sometimes while they’re in a store. Our website also has a lot of different aids in more complex areas, like electronics, that you can access right from your mobile phone while you’re in the store.
What have you learned from working with Facebook?
We’ve spent a lot of time with Facebook. I see all kinds of opportunities for us to change the way we think about communications and marketing so that we can fit into this new, emerging world of social media.
We need to think about how our activities are going to be easily sharable. We need to be able to listen to the reaction of customers easily, and make changes internally to adapt to what is happening in the marketplace on a real-time basis.
How has your television advertising changed?
We’re increasingly using television advertising to set the tone and to make our promise because you can still do that very efficiently with television. What we’re moving away from is being as specific about that promise, because we can’t message about all the various communities of interest on television.
There will always be opportunities in television because television itself is also responding to the different communities. If there’s a fishing channel, and we’ve got a big fishing merchandise story that we want to tell, we are clearly going to take advantage of that.
What does it mean to “create community” with Walmart shoppers?
That’s really changed over the last few years. In the past, we would decide on causes that were important to our customers and then we would make a big announcement and distribute money. Today, we give people an opportunity to suggest where, specifically, that money should go. In other words, we have that money available, but we want to hear from you — our customers, in your community — about where the need is greatest.
There are also communities of interest — people who love crafts or fishing, for example — and we’re probably a little bit further behind in that. But it’s a really important emerging area because these communities are being formed all over the internet and have been for quite a while.
Is there a point at which Walmart’s size becomes a disadvantage?
We’re trying to make sure that doesn’t happen, in part by embracing technologies that allow us to have the kinds of discussions that create community at scale.
Multi-unit retailing has been a reality in this country for a long, long time because it does provide some cost and scale advantages. But the risk that every retailer has had to watch is that they don’t lose touch with individuals and with communities as a result of that.
That’s why social media and local Facebook pages are so important to us. It’s also why Sam Walton made sure that people in the home office are really listening to what’s happening at the store level and put a large amount of decision-making power there.
How do store brands figure into Walmart’s brand identity?
We don’t emphasize them that much because national brands are really critical to how we signal value to our customers. Those partnerships are so important to our joint future together.
There are customers who need to buy private-label brands, and we want them to trust that they can always get them at a great value from us. You’ll see baskets that are 25, 30 or 40% filled with our private brands, but our bigger focus is much more on the national brands.
What is the hardest part of communicating Walmart’s message?
Our company has a certain DNA that really hasn’t changed for 50 years — it’s all about saving people money so they can live better. So, the hardest part is to keep that fresh and interesting from a customer standpoint because we are not an organization that is constantly launching our own new products.
How do you keep that interesting?
I think we’ve kept it interesting with really good storytelling. Some of the work I’m most proud of is when we’ve brought the customer benefit of saving money to live a better life by telling their stories in a way that connects emotionally with customers.
We’ve also had things like last year’s ad-match guarantee as a unique new way of thinking about why you always get the lowest prices at Walmart. You’ll see some communications in the future that hopefully will feel new and different and cause people to reconsider us again for having the lowest prices.
How close is Walmart to Sam Walton’s original vision?
I’d say we’re very close to his original vision. I don’t think a day goes by here where somebody doesn’t quote Sam Walton in a meeting. Our company culture is very strong because of some key tenets that Sam Walton established about how to treat people, how to run a retail business and how to work with partners. Those tenets are reinforced daily around here. That’s number one.
The second thing is: Over the course of when Sam Walton ran Walmart, we did an enormous amount of innovation. We tried all kinds of things. There’s a real component of innovation that’s always been a part of Sam Walton’s legacy.
So, I think he’d be proud that the company keeps trying new things and evolving and innovating, but at the core, that DNA has stayed the same. There is an unshakeable, unchangeable core, but then to survive in business you have to be willing to innovate around that core.
That’s a great way to think about Walmart. We’re constantly evolving. We made some changes a few years ago that were pretty well reported not to have worked out very well. That’s very Walmart — to try something and then if we go too far with it, we’ll pull back or take another direction. I’ve seen that scenario play out hundreds of times at Walmart.
What is the thinking behind your latest logo?
It’s the sixth or seventh logo that we’ve had and it’s really not that complicated. We want to convey that you can get the needs of life at a great price, but also feel modern. We don’t want to lean forward because we’re not that kind of company. We just want to be right on the spot of what’s important today.
The logo seems maybe a little more feminine.
There is a softening, but not so much to make it more feminine but rather more approachable. We’d also seen other companies that have moved from big and bold logos to more authentic and approachable. The reason for that is we’re headed into this more social, conversational kind of a world and we want to fit in a little better with our customers.
How do you see Walmart changing over the coming years?
There will be a much more open architecture, where we will allow more leeway to a store not only to serve its customers but also talk to the customer. One of the reasons marketing is now merged with merchandising at Walmart is that we see a world where our pet buyer in merchandising is going to be talking to pet fanatics, who is going to be talking to department managers in individual stores who look after the pet section.
That three-way conversation will be happening in a real-time way and technology is going to enable that. All of the filters and funnels that we’ve used in the past to make decisions are going to break down so that a head of merchandising can really be an expert on not only what’s going on in the pet product’s world, but also what’s going on in the lives of pet owners.
What will drive growth for Walmart in the years ahead?
In the years ahead, Walmart’s core promise that we’ll save you money so that you can live better is going to be more known by more people than at any other time in our history.
It’s never been more important for us to be authentic and to stick to our core purpose of saving people money so that they can live better. In other words, people will know us for what we really are, and so it had better be good.
It really comes down to a program Bill Simon, our CEO, set forth. We are going to have the lowest prices and we’re going to do that by having the lowest cost and by leveraging our scale. Our growth is going to come from our core promise and keeping that promise to more people.
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