lundi 19 septembre 2011

Walmart is going digital

Walmart is the largest multinational retailer in the world (4,000 stores in the U.S., 200 in China). Digital marketing is a challenge for such a company with mostly lower and middle class clients. Walmart cannot - will not -give up digital media. How will a company whose core of business is mass market (FMCG) break away from mass media. How will the transition take place? The creation of Walmart Labs in Silicon Valley (not far from Googleplex) in April 2011 is a visible sign of a decisive change.
Walmart faces three different and interconnected challenges:
Updated April 30, 2012
  • From DVD to VOD
Sam's Club app for iPhone
Walmart was known as a major in-store retailers of DVD's.  In order to remain in the market, given the recent evolution of VOD - from DVD to streaming (see Blockbuster) -Walmart acquired Vudu in 2010 and entered the streaming-media business, competing with iTunes, Netflix, Amazon and Hulu. Now it offers more than 10,500 episodes for VOD.
By the way, Walmart shut down its online music store in August.
  • From DVD to the Cloud
In April 2012, Walmarts launches "Disc-to-Cloud". People bring their DVDs to their local Walmart store. They pay a small fee and then can access their content stored in the cloud through any device.
  • From Walmart TV to Smart Network and digital signage
Little by little, the in-store TV network, launched in 1997 and operated by PRN, went digital. From satellite broadcasting to IP network, from TV sets hanging high over shoppers' heads to flat screens installed at eye level  in the middle of products (zone specific, endcaps or category screens). Although they steal part of the show from the products (as those of 3Gtv), reducing the facing, screens are here to sell: they support the marketing at the Point Of Sale (POS) digital displays. The message needs to be clear, concise, simple, efficient. Over the last 15 years in-store marketing has gone from TV to display, following the Web and its logic. It is not TV anymore, it is digital signage. Walmart went from TV viewers to shoppers, from audience (30s spots and contacts collected by intercept surveys to build GRPs) to recommendations, conversions and purchases. The next step will establish a proven relationship between what people watch and what they buy: sales lift pricing. Online and offline problems  - and solutions - converge: capping, attribution management, branding, ROI, mobile payment, etc.
  • Smartphones and in-store marketing
Shoppers can use their smartphone for shopping, making lists, couponning, comparing prices, collecting product information (barcode, etc.), looking for products (mapping the stores).
iPhone app for a Walmart store in
Iron Montain (Wisconsin)
Walmart tests the water at Sam's Club with an app: according to a survey, members suggest using  smartphones as membership cards (loyalty cards), for viewing purchase history, discounts, etc.
To go further into digital, Walmart bought Kosmix (social media, April 2011) and seems to be testing Shopycat, an app using social profiles to make recommendations.
Kosmix is known for a platform called "Social Genome" which analyzes purchase and surfing data to improve personalization and recommendations. In September, Walmart acquired OneRiot which will become part of Walmart Labs. OneRiot describes itself as a "Social Targeting Engine" developing a "Social Geo Census Database". Later, Walmart bought three startups specialized in mobile marketing and retail: Small Society, Grabble and Set Direction.
Along the same lines and at the same time, Walmart has invested in two large Chinese e-commerce companies (B2C), Yihaodian (于1号店 ) and 360buy.
Recently, Wallmark launched a localized Facebook app, "My Local Walmart". Customers can download a a store map and receive news concerning their local store: events; savings, etc.
In March 2012, Walmart bought Social Calendar, a Facebook app (birthday reminders, virtual greetings, etc.).

Get on the shelf: @WalmartLabs has launched a contest in order to determine which items should be available on the Walmart shelves, crowd sourcing suggestions for product listing. People vote with videos.

To conclude, for the time being: Walmart going digital opens (or reopens) four major issues:
    1. EDLP strategies (Every Day Low Price) and/or member cards (for personalized EDLP,  "EDLP for me"): which is best and when?
    2. Online and offline strategies, online and offline data. Online marketing is now in line with store marketing, both kinds of data can be merged. At Walmart, e-commerce is no longer independant from offline commerce. Since September, online commerce reports to offline store management. 
    3. Social networking is a growing part of Walmart's strategy
    4. How to take advantage of such fantastic data?

2 commentaires:

Anonyme a dit…

In regards to digital shopping, it seems as though the purpose of a lot of new technologies is to be able to do things more quickly and efficiently, which in turn, would buy us more leisure time.

On another note, I wonder if the the relationship between what people watch and what they buy (sales lift pricing) has already been proven, and which products they used for the trial. I don't doubt the results of marketing experiments like these, but I do wonder why digital signage and televisions advertising things in stores would be more effective than regular signage or displays.


Simona Candrian a dit…

To me it seems like Walmart does a huge effort, to keep pace with the new technologies. The potential of social networks (for example) is there, but it’s dangerous to invest a lot of money. Many companies are using social media or apps but they often don’t know yet, how to use the data. And sometimes they don’t even know why they do it, but they think it’s necessary because the competitors do it. An effect that is called mimetic isomorphism (Course of Personalökonomie HS 12).

Walmart seems to have invested lot of money in different projects, but not all of them will be worth it. I think that some companies, will have problems after investing too much money in new-media-projects, that aren’t profitable in the end. But anyway, it’s always a risk if you make investments in a “new” business part. And I suppose, that a company like Walmart (because they are big enough to afford it) should definitely do it, but always take care and be ready if the outcome isn’t the expected one.