Posted by: Burth Helm on March 28, 2007
He later said he meant just “advertising,” but that’s what Chief Executive Lee Scott replied when I asked him what he expected from the upcoming ad campaign, and how the company planned to get shoppers to buy items like apparel.
Scott and his chief of communications Mona Williams are in town this week to meet with members of the media (they’ve been making news with other outlets, too), and during a lunch with several BusinessWeek staffers today Scott was candid, verging on blunt, about his feelings on advertising, the press, and the retailer’s recent troubles in apparel and home goods. More after the jump.
UPDATE: We now have a longer excerpt of the interview (including topics beyond my focus on the marketing and advertising stuff) here.
He started things off with a harsh assessment of last year’s plan to get more of the 137 million Wal-Mart customers interested in items like apparel and home goods. "We're defined by our customer, not by us...We found we can’t wake up and try to do something new and not earn it,” said Scott. He continued: “You couldn’t have spent enough marketing on Wal-Mart apparel last year.” He said he that though they went “too far, too fast,” they hadn’t altogether abandoned the strategy.
So after a tumultuous year in the marketing department, Scott told us he wants to stick to Wal-Mart’s low-price image, and focus on things like smart consumer research and store planning. The key is having the right product in the right place for the right price, he said, and there’s no reason to try anything fancy. "I care that we have good ads, but whether we have a good TV ad or a bad TV ad doesn't make a difference," he said. "The point is reinforcing the message."
So why did Wal-Mart decide last year it needed a new advertising agency? Scott distanced himself from the move. "Wal-Mart Stores, Inc. did not participate in the decision. It was a divisional issue" for the Wal-Mart U.S. operation., he said. He did go on to say that with new marketing executives, it made sense to start fresh. "Then, in the process, someone forgot to manage it." For those under a rock last year, that was an allusion to troubles with execs like Julie Roehm and Sean Womack, and ad agency Draft FCB.
At one point, he admitted the company has trouble using anything but low prices to gain a marketing edge. That's was the problem in Germany, he said, where high costs prevented it from trouncing the competition. "We could never figure out an ambience...or an attractive proposition that transcended price." Wal-Mart sold off its German stores earlier this year.
So pat yourself on the back, Martin Agency. Have fun with this account.
Side note: At the end I spoke with Mona Williams and brought up the counter-suit, which I blogged a bit about this morning. Williams said she thought Wal-Mart had said what it needed on the topic, but that basically the counter-suit was their way of fighting back against Julie Roehm. Her statements in the press, they felt, were damaging the Wal-Mart brand.
Earlier, Scott pointed out that despite the sting of negative press, it doesn't really hurt business. "It doesn't resonate at the customer level," he said. "Less than a tenth of one percent of our current customers have said they would or have stopped shopping because of negative press." I wish they'd share that research with us.