Ever since Wal-Mart announced its renewed activities in the retail media space, many have wondered exactly what kinds of experiments the company would be attempting. After all, as the world's largest retailer, owner of the most expansive retail television network around, and the first major chain to appoint an in-store agency of record, expectations are pretty high. So when MSNBC started looking at some of the in-store experiments taking place, it wasn't surprising to see that the retail giant is taking a multi-tiered approach to retail marketing, and from the looks of it, everything from a store's layout to its branding to the role of the store manager is on the table right now.
Some of Wal-Mart's most interesting experiments seem to fly in the face of their own traditional retail strategy, like their test of moving the grocery and health/beauty departments - typically the most heavily trafficked - close together, whereas before they might have been 100 yards apart. Instead of keeping customers in the store by purposely locating these departments at opposite sides, Wal-Mart's research suggests that it actually might be better to not have customers wandering back and forth looking for a few common items. As Andy Murray, chief executive of Saatchi X (Wal-Mart's in-store agency of record) says, "[t]he core thing we're trying to do is for the customer to spend less time searching and more time shopping." In fact, Murray notes that, "a shopper might spend 21 minutes in a store on average, but of that only six minutes involves shopping, and the rest of the time she's trying to find stuff."
I can completely relate to this. I don't go to our local Super Wal-Mart that often because I know that when I only need a few items, it will take me a minimum of half an hour to figure out where on earth the items are, get to them (going back and forth across the store several times, I'm sure), get to a register, and check out. While I don't expect to change my shopping habits in the near future, it's encouraging at least to see that Wal-Mart recognizes this kind of problem and is working on potential remedies. I also know I've seen this strategy employed at a local Nordstrom, so perhaps Wal-Mart is just catching up to an approach that other retail segments have used successfully in the past.
In addition to changing the floor plan to make shopping quicker and more convenient, Wal-Mart is also improving the in-store experience, boosting the look and feel of its stores, reducing store clutter, and even testing "shopping destination" services like in-store WiFi that appeal to higher income customers (and presumably keep them in the store longer). That last part seems to go against the aforementioned "get in, get out" strategy, but will likely be targeted towards the more casual shopper with some free time on their hands, as opposed to the quick shopping trips by harried parents stopping in for a few critical items on the way home from work.
Meanwhile, Wal-Mart's Steven Quinn, SVP of Marketing, has stated that "the new paradigm for retail is that the store is a brand," and in order to accomplish such a lofty goal, Wal-Mart is going to have to work closely with Saatchi X to coordinate store marketing efforts, from POP displays to content on Wal-Mart TV. As retail media expert Laura Davis-Taylor notes, this may not be easy, since Wal-Mart will now have to coordinate the frequently-competing demands of its store department managers (who are currently allowed to arrange in-store promotions directly with the brand suppliers without any input from the marketing department). She contends that, "no one owns the store; someone in marketing owns the Internet, and someone else owns the external marketing. But no one owns the store, so it's very difficult to act upon this whole idea of customer-centricity."
If retailers start looking at their stores as a cohesive media environment, will it impact the use of static and digital displays? On the one hand, sophisticated multi-brand campaigns could be more easily carried out on a digital media platform, where the ability to swap out content segments and manage changes remotely would be critical. Using more digital media would also reduce the amount of physical clutter often found in big-box retail and grocery stores, malls, etc., while giving the headquarters complete visibility and centralized control over the messages being displayed. On the other hand, though, today's digital networks are largely fixed in place, whether suspended from ceiling drops, embedded in wall fixtures, or placed on endcaps. While this topography makes maintenance easier, it doesn't always lend itself well to product marketing campaigns that use product surrounds, stacks, and free-standing displays placed in various areas around the store.
But while the mobility problem could be solved with a WiFi or powerline Ethernet connection, the ability to move digital displays might not be seen as a good thing for those tasked with creating a controlled and cohesive in-store environment. (Yes, I just said 'tasked.' Mark that one down on your Buzzword Bingo card and let's move on.) So while central control of a digital network would be a boon to corporate marketing folk, the fact still remains that POP organized at the store level is going to be subject to the demands and suggestions of multiple levels of management, perhaps all the way down to the store or even the department level.
In fact, Saatchi X's Murray hints at this in a brief comment towards today's digital signage efforts in Wal-Mart and elsewhere. As the article notes, "[i]n spite of the current enthusiasm for in-store television and digital signage, Mr Murray argues that the biggest technological revolution in stores will come through mobile phones: customers will use mobiles to compare prices or download recipes, film clips or product ingredients." Think about it, and it makes sense. People already have a personal connection with their cell phones, and in a few years the majority of shoppers will be carrying devices capable of receiving sophisticated multimedia messages. Why deal with the logistical and financial hassle of constantly changing in-store POP when you can just beam the same messages to the customer? Of course, this also doesn't solve the problem of cohesiveness. Now instead of worrying if each store looks and works the same, marketers will have to figure out a way to make sure that shoppers view the right amount of mobile content during their visits, shifting their problem out of a somewhat controllable environment and into completely uncharted territory. Given the proven success of static and digital POP advertising, it's not likely that mobile marketing will bring about a wholesale reduction in other in-store messaging, even when adoption of multimedia-capable mobile devices reaches the majority of the buying public. Instead, it's much more likely that the various forms of in-store and mobile media will come to complement one another, with the precise mix determined by the unique requirements and opportunities of each retailer.
Shopper optimized planograms, revamped rules for POP displays, and digital media on mobile and fixed devices all point to new trends in retail marketing. It's no longer sufficient to simply try and capture eyeballs (after all, if you only have a few seconds to capture that first moment of truth, you're resigning yourself to be invisible for the rest of your customers' shopping trips). Instead, retailers and CPGs are working together to make the retail environment easier to understand and navigate. By presenting shoppers with useful information disseminated over a few carefully controlled media channels (with fewer and more refined bursts of commercial interruption and less visual clutter), Wal-Mart hopes to demonstrate that happy shoppers will reward them with more frequent visits, larger average tickets, and stronger loyalty. With any experiment that involves the human element, what makes sense intuitively and what actually works in the real world can turn out to be very different things. So we'll have to watch and wait to find out if this kinder, gentler approach to the retail environment will deliver on the metrics that count.