If you are going to write something about retail marketing you can’t help but discuss Wal-Mart . So the recent announcement that Mr. Smiley Face-- who starred in Wal-Mart price reduction campaign for so many years-- was being put out to pasture is more than just a simple decision to change ad themes.
One of Wal-Mart’s strengths (and there are many) has long been their market-leading perception as the lowest -priced retailer. You name the category, ask a customer and Wal-Mart always comes out first as the store with the lowest prices. That said, and price always being the first criteria for making a store selection, this was certainly one of the reasons for the chain’s growth to becoming the largest company in the world. I’ve always maintained that a good price perception merely gets you on the competitive playing field in retail, but Wal-Mart parlayed their price perception in becoming king of the hill on that playing field. However, it wasn’t just the low prices that has made Wal-Mart the favorite of more consumers than any other store. Their ongoing campaign with real people—customers and associates talking positively (and believably) while building the trust and respect through their many good works with Children’s Miracle Network, Buddy Walks, etc. - was more than just low prices always. It was genius in building customer trust and loyalty while driving prices lower for all consumers. Of course, this was to the dismay of many small retailers and suppliers who couldn’t compete. But it was and is their strength far and above the low prices that old smiley kept promoting.
So sales aren’t growing at the double digit rates of the past, now everyone falls in love with Target (even though they do 20% of Wal-Mart’s volume), and the company decides that the marketing that put them way out in front must change and bring in the competitor’s thinking (Target), packaged goods marketing strategy(FritoLay) and automotive insights(Chrysler). They fire the agencies that worked so hard to bring the success. Now, let's copy the competitors in getting celebrities who nobody believes shop at the store. And while we're at it, let's ex-communicate old smiley face.
It may work. But if all you do is copy the competition and resort to all the great marketing techniques that have made US automotive retailing lag behind the other countries,is that forward thinking? If you forget the key strengths that makes your check outs far more populated than the darlings of the retail press, is that being a leader? I’m not sure there will be any smiley faces in the boardroom in Bentonville or in the portfolios of investors.
What do you think?
Ken
