Now that digital and social media are reaching what Walmart U.S. Chief Marketing Officer Stephen Quinn calls "critical mass," the retail giant is reshaping its marketing team and changing how it works with suppliers – including buying media for them.
Walmart met recently with around 200 supplier marketing executives in part to discuss the Walmart Exchange, or WMX, which its executives bill as a digital targeting, buying and optimization platform that will bring everything from sales to social-media data to bear on spending plans for Walmart and its suppliers.
"We're going to bring a lot more tools that our vendors can use with Walmart that will make their digital marketing a lot more effective," Mr. Quinn said in an interview. "If you think of a P&G and Samsung, it lets them see that their marketing is actually having an impact at Walmart, and we're able to speed up reporting in real time. It's pretty much a holy grail for us as marketers."
Walmart's growing focus on digital technology and social media, where Mr. Quinn said new Wamart Stores CEO Doug McMillion "is really adding fuel to the fire," has also led the retailer to reshape its marketing team and its roles.
Wanda Young, who was the retailer's chief digital executive, recently had her duties expanded to oversee media too as VP-media and digital marketing, a move to recognize the growing role digital has in steering the entire marketing effort.
She, along with Brian Monahan, VP-marketing at Walmart.com, are helping drive WMX, which she described as "software in beta."
WMX is Walmart's play to apply "big data" to marketing, Ms. Young. So it involves using Walmart's own trove of data from Walmart.com to store sales to social-media platforms and third-party data. The retailer wants to fill in one of the gaps in that data with its Savings Catcher program designed to get shoppers to input their offline store receipts into their Walmart app, which will generate a database the retailer hopes will rival those of other retailers' loyalty programs.
"On top of that," Ms. Young said, "we will build all of the other data populations you can use to create customer segments. And then, yes, we will use that in partnership to go out and buy media on behalf of our suppliers."
Walmart's media shop MediaVest is working with WMX in buying Walmart digital ads, but it's not clear whether the shop will get involved with buys for any suppliers. Some supplier executives considering WMX are working with their own digital-media agencies.
Walmart declined to comment on how financial terms with suppliers would work, but Mr. Monahan in a talk at the Ad Age Digital Conference in April compared it to Walmart's historic efforts to lower costs in other parts of the supply chain to pass savings along to shoppers.
One supplier executive said the idea "fits with [Walmart's] eternal desire" to get suppliers to lower ad budgets and "put the dollars into a lower price for them," adding that he'd be open to using WMX if tests show it works well.
Asked if Walmart has its own demand-side platform, Ms. Young said, "We're working through the systems evolution. If you think about it, the engineers who sit behind WMX, realistically, that is kind of a demand-side platform. But the software is going to evolve. So we'll continue to look at how much of it stays an in-house only solution or which partners we continue to work with."
Ms. Young said Walmart also has been talking to online publishers "working to build up the way the WMX advertising pool fills, and we're going to be working to build that so it gets bigger and bigger."
While WMX today applies to display and search, the goal is to apply it to other areas, such as e-mail and mobile, Mr. Quinn said.
"The big bet we're placing is that almost all media will eventually be addressable in one form or another, and so all this capability and the infrastructure under it will only grow in value to us," he said. "So it's a big shift in the entire advertising world toward digital solutions and that's where we're going with broadcast. We use our own data to help us inform our television buys so we're reaching the right customers. And that's true even of our print."
Even print essentially is becoming digital in a sense for Walmart, which is preparing a pilot that will let people get reviews or other product information on their smartphones by scanning the product ads in its newspaper and direct mail.
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