Wal-Mart’s Holiday Message: “We’re Not Scrooge-Like at All!”

Wal-Mart’s trying to shed it’s mantle of the cheap, heartless price-slasher, but cheap products are all Wal-Mart knows. As this article explains, the company is attempting to forge emotional bonds with its customers, but only comes off as hypocritical. Years of employee abuse, sweatshop sourcing and corporate greed can’t be wished away: if Wal-Mart wants its customers’ trust, it had better start making substantive changes to its business practices.

Wal-Mart Wants to Carry Its Christmas Ads Beyond Price [New York Times]

The possibility that consumers will hesitate to spend for the holidays is worrying retailers as the Christmas shopping season gets under way. Wal-Mart, the nation’s No. 1 merchant, is starting its big holiday advertising campaign today with an upbeat appeal that seeks to elevate saving money from a necessity to a virtue.

The goal of the campaign, by the Martin Agency in Richmond, Va., part of the Interpublic Group of Companies, is to promote low prices as a means rather than an end — less Scrooge and more Tiny Tim.

For instance, in one commercial, the question, “What will you do with your savings?” is answered by showing a grinning boy riding a bicycle with a big red gift bow atop the handlebars.

A print advertisement presents a house and yard ablaze with Christmas lights. “With great holiday decorations at unbeatable prices,” the headline says, “we’ve got two words for you: backup generator.”

In another commercial, a wife raves about the “incredible” price she paid for a Toshiba HD-DVD player she bought her husband. “All I know is that Christmas is going to be a very, very good day,” she says, smiling.

Another print ad, decorated with a ribbon-bedecked ornament labeled “For every wish,” shows gold jewelry; the prices are displayed near each earring, bracelet and necklace. “We make it affordable to have a heart of gold,” the headline declares.

The goal is to persuade budget-minded consumers that “the more you save, the more Christmas you can give,” said Stephen Quinn, chief marketing officer at Wal-Mart Stores in Bentonville, Ark.

“The core statement of our holiday program is that you can save money if you shop at Wal-Mart,” he added, but to “find more positive and more emotionally connective ways” to express it beyond prosaic appeals to buy stuff cheap.

This is the first holiday campaign for Martin, an agency best known for its humorous Geico insurance campaigns, featuring offbeat characters like geckos and cavemen. The work for Wal-Mart is more mainstream in its approach, reflecting the retailer’s heartland roots.

Martin took over in January as the creative agency for Wal-Mart’s general advertising account, with spending each year estimated at close to $600 million. There are also holiday ads aimed at Hispanic consumers, created by López Negrete Communications; black consumers, from GlobalHue; and Asian-Americans, from the IW Group, another Interpublic agency.

The results of the campaign will be closely watched, because how Wal-Mart fares at Christmas could foretell the health of the American retail economy as shoppers struggle with rising energy prices and falling home values.

“Tough times are actually a good time for Wal-Mart,” Tom Schoewe, chief financial officer, said during a meeting with Wall Street analysts last week, because “our customers care a lot about price and value.”

In September, Martin introduced a theme for Wal-Mart that is intended to reclaim the retailer’s reputation as middle America’s favorite discounter while adding uplifting sentiment to the sales pitch.

The result — “Save money. Live better” — appears in most of the holiday campaign, which will include television, magazines, newspaper circulars, ads on Web sites and signs in stores. It supplants the more bargain-focused slogans Wal-Mart has used in previous years, which included “Always low prices.”

The “save money” part of the theme “is in the DNA of Wal-Mart; it’s why it was created,” said Steve Bassett, creative director at Martin.

The “live better” part is intended to offer “a great promise,” he added, beyond “we’re having a big blowout sale.”

That is particularly important for Christmas, Mr. Bassett said, when consumers want to be “celebratory” rather than to dutifully count pennies.

“One of the pillars of the work is, ‘Let’s express joy,’” he added. “We want people to come away with, ‘Wow, it’s going to be a great Christmas this year, and Wal-Mart will be part of that for my family.’”

Wal-Mart’s holiday marketing tactics have varied widely from one year to the next. This is a reflection of its recent struggle to determine whether it ought to concentrate on its traditional blue-collar customers or woo more affluent shoppers.

In 2003, Wal-Mart cut toy prices so deeply it set off a price war with Toys “R” Us and KB Toys, which sent KB Toys into bankruptcy. The next year, Wal-Mart went lighter on the cutbacks, hurting sales.

In 2006, the theme of the holiday campaign was “Be bright,” as Wal-Mart sought to stimulate sales of more expensive merchandise like designer sheets.

But sales slumped, so price cuts, which Wal-Mart calls rollbacks, quickly returned, creating an uneven tone.

“We had been experimenting a lot,” Mr. Quinn said. “The experimentation process is over.”

“We’ve hit a groove on what our core positioning is,” he said, but because “people already know Wal-Mart is a place to save, we’re trying to make sure there is an emotional connection and not just an empty promise of ‘Save, save, save.’”

For Christmas, the campaign will express the thought this way, Mr. Quinn said: “It’s great to save money, but the feeling you get giving the bike the kid wants is the payoff.”

A commercial for Hispanic shoppers makes that point by showing how the low price on a doll lets a mother also buy clothes for the doll, he said, “rather than saying, ‘You’ll save two dollars here, a buck fifty there.’”

Whether shoppers speak Spanish, English or Esperanto, Wal-Mart needs a big Christmas.

Despite record sales and earnings, Wall Street is worried about the company. Sales at Wal-Mart stores open at least a year, a crucial yardstick in retailing, have risen but at a steadily falling rate — from an average of 3.6 percent a month in 2005 to 2.1 percent in 2006 to 1.5 percent so far this year.

A plan by Wal-Mart to use big-name brands and rock-bottom prices to lure customers has worked in the electronics and grocery departments, but it has so far failed in the home and apparel sections of the stores.

“Clearly, we’re on a longer-term path to ‘fix’ those businesses,” Mr. Quinn said, adding that for the holiday season there will be an emphasis on “a lot of basics: fleece, jackets, hats.”

For those who like decorating their homes for the holidays, Wal-Mart will for the first time operate themed Christmas shops, Mr. Quinn said. In many stores, they will be in the lawn and garden departments.

The special shops will also stock Christmas toys, video games and foods.

The shops are another example of how Wal-Mart is seeking to offer shoppers “higher-touch” experiences than before, Mr. Quinn said, and help them “get into the Christmas spirit” instead of coming to Wal-Mart to trudge the aisles for bargains.

The focus on well-known brands in electronics will continue for the coming Christmas, Mr. Quinn said, listing names like Sony and Toshiba. In the commercial about the Toshiba DVD player, the wife says the price was so low that “even for Wal-Mart, I was surprised.”

In a study released this week by BDO Seidman, 73 percent of the chief marketing officers at retailers said discounting and promotions would be more common this holiday season than last year. And 54 percent said sales would be flat compared with the 2006 holiday season.

To help jump-start the holiday shopping season, Wal-Mart announced yesterday that it would offer door-buster discounts three weeks before they traditionally appear. Five popular products, including a laptop for $350, will go on sale at 8 a.m. tomorrow rather than the day after Thanksgiving.

Wal-Mart said there would be additional door-busters on Nov. 23.

The holiday campaign will appear on TV networks like ABC, ABC Family, CBS, CMT, CW, Discovery, E!, ESPN, HGTV, Lifetime, NBC, Nick at Nite, TBS, TLC, TNT and USA. The publications to carry the print ads include Better Homes and Gardens, Family Circle, Parade, People and Redbook.

Posted by Alex Goldschmidt on Thursday, November 01, 2007

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