Sleeping Giant at Walmart Wakes -- Its Vast Workforce

Measures to Motivate, Mobilize Staff Are Opening up Opportunities for Consumer Brands

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With some 1.4 million employees on its U.S. payroll, Walmart's world is about as large as the state of Maine. That's massive by any standard, but when you consider how social media amplifies that number, it's not simply a huge group but an influential one. No small wonder, then, that the earth's largest employer is taking greater measures to motivate and mobilize its people -- and opening up more opportunities for consumer brands to also reach them along the way.

Among the retail behemoth's recent and upcoming moves: revamping its internal employee social network and switching publishers as a prelude to beefing up its in-house magazine, Walmart World, with both more content and outside advertising. The latter could prove an even greater magnet for brand marketers trying to sway Walmart's in-house influencers, particularly now that the chain is allowing local managers more agency to green-light items and is encouraging employees to promote specific items in their stores.

Walmart will also give store managers and employees credit for online sales that come from their territories as of Feb. 1, the start of its fiscal year.

Walmart isn't owning up to any blanket campaign to better leverage employees as brand ambassadors (a spokesman declined to comment), but it appears to be moving in that direction.

With social media potentially giving employees an even bigger impact on brands today, the role of human resources in marketing is even more important, said Scott Bedbury, principal in consulting firm Brandstream. "Social connectivity is often seen as an external thing but can have a very powerful dynamic internally."

Walmart U.S. CEO Bill Simon and new Chief Merchandising Officer Duncan McNaughton have encouraged reinvigorating the "Volume Producing Item" program originated by Sam Walton in which individual employees adopt and promote items in their stores, according to people familiar with the matter. And Mr. Simon gave local managers more authority to make buying and merchandising decisions when he took charge of the U.S. business last year.

As for Walmart World, it recently shifted management from Rodale Custom Publishing, after a five-year run, to Pace Communications.

The strategy has always been to use Walmart World as a conduit for brand marketers to reach Walmart employees, Rodale sales materials point out. But the shift to Pace aims to accelerate that effort, according to people familiar with the matter.

Pace referred questions to Walmart but clearly has been advertising lately to staff up for the retailer. Among recent hires for Pace was last week's appointment of Kevin Briody as director-digital strategy. He's a veteran of Microsoft and most recently director of strategic innovation for Ignite Social Media, a firm that 's worked with Nike , Chrysler and Verizon.

Pace is also expected to have input on a revamp of MyWalmart.com, the internal information source and social network originally developed by Rockfish Interactive, Rogers, Ark., but that is now getting project work from Organic , San Francisco, according to people familiar with the matter.

It's not clear how much ad revenue Walmart World has made or whether MyWalmart.com will become a profit center. But the former already takes in millions of dollars annually in ads from vendors seeking an audience with Walmart employees, according to people familiar with the matter.

Among advertisers in the magazine have been Procter & Gamble Co., Unilever, Johnson & Johnson, HP and Jackson Hewitt, the tax-preparation service that operates in 2,000 Walmart stores and made outreach to Walmart staff part of its ad campaign last tax season.

One good visual to illustrate how national-brand media dollars already flow to Bentonville to sway Walmart employees is at Arvest Ballpark, home of the minor-league Arkansas Naturals baseball team. The ballpark is plastered with far more national packaged-goods brand advertising than Major League stadiums, much less other minor-league ballparks. Some is from the team's owner, Bob Rich, also chairman of Rich Foods, but other ads come from Nestle's Digiorno frozen pizza, Kraft Singles and the P&G Family Four Pack ticket-and-meal deal.

Efforts to leverage rank-and-file Walmart employees, either directly for Walmart or by proxy for its supplier brands, meets with predictable skepticism from the retailer's critics. "It's really hard when you're a person making poverty-level wages, just had your health-care premiums raised 60%, and you can only get part-time hours, to be a good ambassador for the brand, no matter how much you love it," said Jennifer Stapleton, spokeswoman for Making Change at Walmart.

But employee rankings at Glassdoor.com paint a more nuanced picture. With an average employee satisfaction rating of 2.9 on a five-point scale, Walmart actually edges unionized rivals Kroger Co.(2.8) and Safeway (2.7), but lags behind other rivals, including Target and Amazon at 3.2 and Costco at 3.6.

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