The retailer's request for proposals, authored by the search consultant Select Resources International and obtained by Advertising Age, gives a glimpse at the changes sweeping the Bentonville, Ark.-based giant.
The new Wal-Mart
It's a concise detailing of just how far the marketer, once perceived as rather bumpkinish, has come from a price-focused advertising it used throughout much of its history, best symbolized by the largely disposed-of Mr. Smiley. It also suggests how far it could go in restocking its marketing toolbox, ramping up the use of nontraditional media, in-store marketing, and customer-relationship management and loyalty programs.
Wal-Mart announced the review -- which includes creative, media, interactive and minority advertising -- in May, following the installation of a new marketing team led by Chief Marketing Officer John Fleming, a former Target Corp. executive. Following decades of growth, the retailer's stock price has been struggling and many analysts have noted the much-smaller Target's faster growth and marketing innovations.
Key organizing principle
Wal-Mart "needs to identify what its brand is," said Rita Rodriguez, U.S. CEO of WPP Group's Enterprise IG. It "needs to find the kind of organizing principle that Target has -- fresh, design-oriented -- and it doesn't have that yet."
The central business challenge facing Wal-Mart isn't getting people into stores but figuring out how to get them to spend more once they're there. That means changing the habits of the "selective Wal-Mart shopper," as the RFP terms a consumer who visits the store 43 times a year for specific items but rarely branches out into other departments, like the apparel section or the electronics aisles with their shelves of higher-margin goods.
"Finding more ways to help Wal-Mart get its customers to use Wal-Mart more broadly is key," it reads, noting that the retailer is undertaking a complex segmentation study "to help the company better understand the diverse needs of its customers in order to create more compelling reasons to cross-shop the store and drive loyalty."
'Store of the community'
Wal-Mart is implementing what it's dubbed "the store of the community" strategy that will have it create customized experiences -- both in merchandise and in marketing-based on the profile of shoppers in the surrounding areas. The segments it's focusing on are Latinos, African-Americans, baby boomers, high-income and rural shoppers. As part of this, the retailer has already said it will stop selling firearms in about a third of its stores.
Given this, Wal-Mart's future agency team will have to be able to come up with ideas that can live in the in-store environment. "Candidate agencies that can create campaigns that translate from screen to store will be highly valued," the RFP reads. It also tells of the need for "a retail machine" that's at least 400-employees strong and has access to a global network.
The RFP has gone out to more than a dozen agencies, including incumbents Omnicom Group's GSD&M and independent Bernstein-Rein.
Wal-Mart is soon expected to develop a list of six to eight contenders to meet with the marketer. Afterward, the client will cut to four shops that will complete an integrated assignment followed by integrated "dream team" work sessions in August with final presentations scheduled for the 23rd and 24th. Team selection is expected in September.