Wal-Mart: Unlocking value in a better corporate image

by The City Wire staff ([email protected]) 178 views 

When you are the world’s larger retailer and the nation’s largest employer just about anything you say becomes news, so choosing your words carefully is always a concern.

A couple of months ago, Wal-Mart turned the microphone on itself and began marketing a message through its army of 1.2 million U.S. employees.

Battered by media accounts of sparsely stocked shelves, union-based protests and ongoing global compliance issues, Wal-Mart chose to spotlight its employees in a campaign dubbed “The Real Walmart.

Analysts say it has been a smart move as the company has faced an onslaught on publicity from organized Labor in recent months.

Bill Simon, CEO of Walmart U.S., said last month, “We have our own story to tell and we are going to share it. We have wanted to do this for a long time because we know that people trust Wal-Mart even more when they understand the opportunities we provide our associates, who the customers are that shop with us and how we deliver low prices,” Simon added.

Alan Ellstrand, expert in corporate governance at the University of Arkansas, said Wal-Mart has always been an easy target for activists who often object to the company simply as a matter of scale.

“While we don’t know right now how well this marketing message is resonating, it only takes a percentage or two at Wal-Mart’s scale to move the needle in a meaningful way,” he said.

With U.S. sales of nearly $275 billion last year, and 140 million customers shopping each week, another shopping trip per family or a few more dollars spent could add millions to the retailer’s top line growth. Ellstrand said there is little downside to this strategy, given the lower cost ad campaign, and if it resonates with people who aren’t already loyal shoppers the payoff could be big.

Wal-Mart continues to air advertisements that feature its associates just as often as it airs the low cost shopping ads, and the retailer’s website also features dozens of interviews with Walmart employees who were in Bentonville for the company’s annual shareholder week held last month.

Wal-Mart recently linked its own corporate magazine Walmart World on its website for public view. This is the first time the internal magazine has been shared with mainstream media and available for public consumption.

“The more we introduce people to what we do and how we do it, the more they understand the positive difference we can make for customers, associates and communities,” Simon said.

Art Weinstein, author and scholar on business to business marketing and corporate value, said “Wal-Mart is peeling back the layers like the skin of an onion, moving toward its foundation.” He said this look at a human face, the individual stories, can help make mega corporations more appealing at a time when big business often carries negative connotations in some minds.

Wal-Mart has small town roots but it’s often seen as an imposing giant. Weinstein said showing the human face, if nothing more, can help combat that impersonal image of big business. He said Wal-Mart has a loyal core base but if they can reach beyond that to include millennials or shoppers not just motivated by price, they stand to win market share in a highly competitive retail landscape.

“Zappos is doing something similar using videos on its website to share a human side of its online retail business (Zappos does not have brick and mortar stores),” Weinstein said.

Companies like Apple, Amazon and Subaru are deemed “cool” by consumers which is a designation Wal-Mart has not been able to attain, at least for now.

“People respond to ‘cool’ companies and there is no faking it,” Weinstein said.

He said Apple is still considered “cool” even through it’s going through a transition following the death of Steve Jobs.

Amazon is “cool” because its founder Jeff Bezos is continually stretching boundaries for retail. Subaru serves a niche market and does not try to compete with Toyota or Honda and has a loyal following of active, environmentally conscious and smart consumers, he said.

Weinstein isn’t sure Wal-Mart will ever be “cool," but that’s okay because the company is relevant in that it rings up sales of more than $36 million every hour of every day. If the company can grow at just 4% annually, that could be a "cool" number for shareholders.