Wal-Mart plans campaign to woo back shoppers
04/12/2011 7:15 AM
04/12/2011 7:15 AM
NEW YORK — Wal-Mart Stores is hammering home its low-price message with a new ad campaign in a bid to bring back customers who no longer trust it to save them money.
The campaign, starting Monday, bears the slogan "Low Prices. Every Day. On Everything" and features five 30-second commercials, including ads featuring an Easter egg hunt and a customer asking for a price match.
"We have lost our customer confidence... in having the lowest price," said Duncan MacNaughton, chief merchandising officer at Wal-Mart.
The new commercials come as Wal-Mart tries to reverse a nearly two-year slide in an important revenue measure at its U.S. business.
Sales at those stores are hurting because of mistakes the retailer made on price and selection. Wal-Mart also faces increasing price competition from dollar chains and Amazon.com.
In fact, its slogan "Save Money. Live Better," in use for several years, now appears in smaller type in the ads, underscoring Wal-Mart's shift in strategy to hammer hard that it has everything shoppers need at rock-bottom prices.
Wal-Mart is restoring thousands of items it had stopped carrying in an overzealous bid to clean up its stores, such as fishing supplies in Dallas and snowblowers in Minneapolis, and has returned to its "Everyday Low Prices" roots.
To change perceptions, the company also said it is directing store employees to comb through competitors' advertisements so price matches at the register are easier.
"Our company is determined to create the best one-stop shopping experience and low prices on the right products backed by a clear, consistent ad match policy," MacNaughton said.
Last year, Wal-Mart had strayed from its "everyday low prices," the bedrock philosophy of founder and namesake Sam Walton. Late last year it switched back to emphasizing low prices across the whole store, instead of heavily promoting selected items.
It could take a while to reverse the sales declines. The company predicted in February that revenue at stores open at least a year for its U.S. Walmarts should be anywhere from down 2 percent to unchanged for the current quarter compared with the same quarter last year.
The campaign is an acknowledgment that Walmart traffic is still weak, Wall Street Strategies analyst Brian Sozzi said.
"I am concerned that Wal-Mart is taking to the airwaves at the same time it acknowledges it's not where it needs to be with product restoration, therefore risking customer disappointment yet again," he said.
Moreover, he said stores are looking disheveled because new merchandise is coming in faster than it can display and sell it.
"Has customer traffic been so soft in the first quarter that Wal-Mart is willing to go out on a limb and market aggressively despite the store appearance reflecting a sense of disarray?" Sozzi said.
Wal-Mart said it is adding 8,500 items to its inventory, 11 percent more in an average store. In some categories, the selection will be more than before the inventory slashing, MacNaughton said.
The changes are bringing back local food favorites and national brands in household basics and general merchandise like consumer electronics. Some changes are tailored to local markets. In Phoenix, for example, shoppers will find pool supplies and lawn and garden items year-round.
Wal-Mart said it will take a few more months to finish bringing back the grocery items and will take the rest of the year for departments like clothing and electronics.
Late last year, Wal-Mart had said it aimed to have all the groceries restored by the end of 2010 and would add back the general merchandise items by spring.
Wal-Mart's price-match policy has been around for several years, but in recent months, the company has been using it as a weapon to compete with rivals.
Wal-Mart said it has been training sales associates to better police prices of local competitors.
Another change is customers won't have to bring competitors' advertisements to the cash register to get the match because the associates should have the information on hand. Customers will still have to ask for the price match.