Wal-Mart seeks agency to burnish reputation

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Help wanted at Wal-Mart: Come clean up our brand.

The world's largest retailer, nagged by complaints about its business practices, has been talking to a handful of consultancies and ad agencies about a project that could lead to a brand-image overhaul next year, according to executives familiar with the situation.

The talks, focused on the retailer's "brand essence," are being driven by negative perception of Wal-Mart pushed by its many detractors. Wal-Mart's goal is to begin to implement a new corporate brand identity in February 2007. A selection of a firm is said to be imminent.

For more than a year, Wal-Mart has fought on various fronts to improve its ailing corporate reputation, an effort that began somewhat clumsily with CEO Lee Scott touting the line "Wal-Mart is great for America," during an April press gathering in Bentonville.

The retailer has also been more aggressive in taking on its detractors. To manage its public affairs, it hired PR giant Edelman, who created a political-campaign style "war room" manned by election-trail vets who could react swiftly to broadsides from unions and groups like Wake Up Wal-Mart.

Trailing target

It most recently commissioned a year-long economic-impact study by Global Insight to stage an academic conference in November 2005 highlighting research on the retailer's economic impacts.

Yet nothing seems to have moved the needle, especially when it has come to turning around same-store sales trailing that of much smaller rival Target Corp. and an ailing stock price.

The discussions about its brand identity are being led by the marketing department, notable because, under the direction of Chief Marketing Officer John Fleming, Wal-Mart has gotten away from the corporate-brand advertising of the kind that once involved spots featuring real Wal-Mart employees.

A company representative declined to comment on the project, other than to say it won't affect roster shops, Omnicom Group's GSD&M, Austin, Texas, and independent Bernstein-Rein, Bentonville.

"Anything we are looking at right now is completely outside the scope of normal advertising and doesn't have anything to do with reviewing the advertising agency," said spokeswoman Gail Lavielle.

Wal-Mart has yet to find the right strategic direction to repair its corporate reputation, according to Stephen Greyser of the Harvard Business School, an expert on corporation reputations and crisis communications.

Any strategy Wal-Mart tries-consumer or public-relations driven-must pass a rigorous credibility test, especially from stakeholders outside its base of shoppers, from union groups to policymakers, he said.

"No matter what you are saying, it has to be believable, and that's where, in my view, Wal-Mart has had some questions in marketing in the past. Any new campaign has to pass through a filter of credibility."

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