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SOMEBODY GOT SHOT The recent Forbes article “Wal-Mart Shoots Itself In The Foot” (January 31,
2011) regarding the realignment of Marketing under Merchandising as being a poor
decision is without merit in my opinion. I do agree with the author that
marketing has to stay current. The dynamics of how to reach, measure and
understand today’s consumer are complex. It is paramount, as the article
states, that marketing does research, looking for new solutions and trends.
Yet I strongly disagree that the reporting realignment will somehow shackle
marketing at the whim of Wal-Mart’s head merchant. The issue is not to
whom marketing reports, but rather what is the message marketing promotes.
The current marketing group began its tenure about six years ago. They
discarded the corny smiley face, (it was time) changed the logo (a good
decision, it needed updating) and of course expanded the formats used to reach
consumers. All of these changes were positive. Of more questionable change was
the wholesale dismissal of the agencies that understood the necessity of
promoting the Wal-Mart brand, instead using co-op advertising dollars to promote
specific items and sales. This change resulted in the focus of marketing on
short-term sales; the exact strategy that the author thinks will now be
implemented with the reporting realignment. Moreover, this change resulted in a
marketing program that copied other retailers, where in the past the opposite
occurred. The current campaign of “We’ll Match It” is a strategy that Wal-Mart
forced on other retailers. Now it is Wal-Mart’s most used campaign. “Always
Low Prices Always” and “We Sell For Less” slogans were discarded. Fine, change
is good. But abandoning the brand message for the sake of change is a losing
strategy.The author argues that Wal-Mart has fallen and is now outgunned by rivals such
as Kohl’s and Amazon. Certainly Kohl’s, which had an18% sales growth from 2006
to 2010 (33% growth in square footage) and Amazon, the standard bearer of
dot.com retailers (57% drop in profits as I write this), are successful
companies. It is at times hard to measure Wal-Mart’s success (sales grew to
422 billion in 2011 up from 220 billion in 2002, Wal-Mart International sales at
105 billion and profits of 5.6 billion) because the company is so big. As a
friend of mine once said, “they will forgive you for everything except success.”
Yes I am a very biased Wal-Mart supporter. I had the privilege of working with
Paul Higham (retired Wal-Mart CMO), and agency personnel Skip Rein and Rusty
Scholtes, Gene Morris, Alex Lopez Negrete, the legendary Roy Spence and the late
Gary McGee. My advice to Duncan MacNaughton is this: never lose sight or
respect for Wal-Mart’s brand and the people who understood that the brand is the
message. Hire Paul Higham to consult about one hour a month and send everyone a
copy of Roy Spence’s book, IT’S NOT WHAT YOU SELL, IT’S WHAT YOU STAND FOR. It
should help.I do admit that I like their new slogan “Expect More Pay Less.”
OOPS.
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