Wednesday, April 19, 2006

hello mrs. howell, goodbye smiley

from Chain Store Age

Wal-Mart Image-Building Continues
Rogers, Ark. - April 19 - The lineup of presenters at Tuesday’s Wal-Mart Media conference in Rogers, Ark., brought equal doses of flattering statistics and image-building policies for the world’s largest retailer. The session also touched on merchandising, health-care improvements and diversity.

The two-day Wal-Mart event here at the Embassy Suites Hotel also brought critics. Around the corner from the official proceedings, a small group organized by blasted Wal-Mart for failing to pay a “living wage,” charging too much for health care and failing to do more to improve working conditions. The small press conference included a handful of employees and former employees of Wal-Mart Stores.

The retailer responded to critics by pointing to enhancements to its low monthly premium Value Plan and a pledge to “be the champion for the 1.3 million associates and help them get the best health care they possibly can,” said Susan Chambers, executive VP of the people division.

Highlighting other developments from the conference Tuesday, the company disputed reports that it was moving upscale, despite revealing a plan to offer more expensive items both in stores, and to an even greater extent, online.

“Wal-Mart is not going upscale,” said John Flemming, executive VP of marketing, “but will focus on the selective shopper. Now, in order to do that, we have to have a broad range of categories.”

For instance, a $298 patio furniture set was described as “the point where our relationship with the customer ended last year.” Now, the relationship extends to a $698 set with a fire pit, and an $898 five-piece set available at Executives emphasized the chain will maintain its always-low-prices strategy.

In the merchandising area, Claire Watts, executive VP of merchandising and apparel, described how Wal-Mart has worked with suppliers to identify the five key women shopper segments—each given a name. The pragmatist (Norma), value shopper (Karla), the classicist (Susan), the style seeker (Gracie), and the fashionista (Jen).

On the topic of diversity, a reporter asked why none of the eight management representatives assembled at the platform was black. Eduardo Castro-Wright, president and CEO Wal-Mart Stores-USA, responded that he was proud of the fact that of the eight managers in question, one is Hispanic (himself), and three are women.

Wal-Mart to Demote ‘Smiley’ in New Marketing Strategy
New York City - April 18 - The grinning yellow “Smiley” icon that has been the centerpiece of Wal-Mart Stores’ "always low prices" advertising for the past 11 years is being demoted in favor of actors and celebrities who will promote products rather than focus on low prices.

The Wall Street Journal reported that in a sweeping overhaul of its mass advertising in the past year, Wal-Mart and its two ad agencies, Bernstein-Rein Advertising Inc. and Omnicom's GSD&M, are looking to motivate customers to shop for more than just basic goods. The discounter wants to spur more sales of high-margin general merchandise to boost its sluggish growth in same-store sales.

Wal-Mart's new ad strategy is to appeal to shoppers' interest in an intriguing yet calm shopping environment rather than sending Smiley careening across their television screens slashing prices on products.

Smiley "was a character that we dressed up, and we have tried to move from that to an emotion, a feeling," John Fleming, Wal-Mart's chief marketing officer, told The Wall Street Journal. “We'll see how it goes and evaluate it."

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