Wal-Mart exec looks at retail future

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[chicago] While retailers keep a wary eye on Wal-Mart's next move on land and in cyberspace, the executive leading the retail giant's marketing strategy has some concerns of his own about the future.

Chief among them: privacy, the uncertain nature of research and new pressures on marketers to develop a competitive advantage.

One of marketing's most influential and publicity-shy executives, Paul Higham, senior VP-consumer communications at retail giant Wal-Mart Stores, voiced those concerns in remarks to the Retail Advertising & Marketing Association's "Retail Advertising Conference 2000" last week. His talk discussed challenges facing marketing.


"Watch for a real effort by consumers to unplug their personal space," which has lately been invaded by devices such as cell phones, said Mr. Higham. Marketers also need to take the issue of consumer privacy seriously, he noted. With the move to online shopping, as one-to-one marketing increases, privacy will become a hotter issue than ever. "Respect it," he said.

To harness e-commerce, marketers need to understand the Internet's effectiveness cannot be measured in terms of traditional media, just as TV has a different effect on consumers than print.

"Let's try to remember that [the Internet] is its own thing. Trying to measure Web marketing in the same sense that we try to measure consistent media is very, very unproductive and will frustrate us," he said.

Mr. Higham also questioned some ad practices that dominated the 1990s, such as what he called "MBA-ism," noting that rational, logical answers marketers previously sought need to be replaced with an emotional balance. While marketers in the past looked for "proof" ads would work, he said, "We now have proof that our need for proof was bogus."

Other coming trends Mr. Higham cited included tangibles, such as the spending power of aging baby boomers and the coming onslaught of biologically engineered products. Some he cited were more nebulous. For example, consumers are crying out for authenticity, he said. "We want the real thing and we're unsatisfied with the whole process of concoctions. We don't want it to be phony any longer."

Other challenges the industry needs to grapple with are ways to tap consumers' rapid learning curve, understanding "connectivity" and the impact of rapid information dissemination.

"What do we do to inoculate ourselves against the uncertainty?" Mr. Higham asked. Although community relations programs and cause marketing might help build a business, he noted, "There is no way to bulletproof" a company.


Wal-Mart, under Mr. Higham, has grown to one of the world's largest and most powerful retailers with sales of $164.8 billion for its fiscal year ended in January, up 19.8%.

Even so, Wal-Mart spends far below the retail average of 2% of sales on marketing, only about $404 million, according to Advertising Age data. Measured media-focused on a price rollback campaign and one featuring store employees and customers-reached $240 million in 1998, with $231 million spent during the first five months of 1999, according to Competitive Media Reporting.

Mr. Higham also cautioned marketing executives, particularly those in the retail arena in which a number face reorganization and even liquidation, about making the right decisions during changing times.

"Company success is not only an indication of our personal success, it is in fact our job security," he said. "Retailing," he said, "is the business of being chosen."

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