Wal-Mart's SVP-Marketing, Stephen Quinn

Stephen, who was previously the CMO of Frito-Lay, became the SVP of Marketing at Wal-Mart a little over one year ago. He shared insights into the key strategic platforms that drive Wal-Mart’s marketing decisions.

Since joining Wal-Mart, Stephen has helped spearhead a significant re-invention of the Wal-Mart brand. “One of our agencies, Lippencott said the only brand project that would be bigger would be re-branding the United States.” Stephen’s statement was a little ironic after Linda Kaplan Thaler’s comedic video clip about Wal-Mart merging with the United States. He felt the need to respond to Linda’s video and said there was no truth to Linda’s video, but joked about Wal-Mart’s interest in expanding their efforts in China.

Stephen discussed how Sam Walton’s legacy and business model live on today. Walton’s dream of a neighborhood Wal-Mart giving back to the communities they serve is a foundation of the company’s strategy today.

As many people are well aware, Wal-Mart has been under intense media scrutiny in recent years and it is a serious concern for the company that they must pro-actively combat. In addition to their emphasis on reaching out to the communities they serve, Wal-Mart has increased their sustainability efforts. They are implementing a number of initiatives to eliminate waste and save energy and resources.

Stephen showed a chart of the top 10 retailers from 1970s vs. top 10 retailers today and pointed out that no retailers from the 1970s were on today’s list. In order for Wal-Mart to maintain their status as the #1 retailer they need to continue to pro-actively respond to the market and listen to their customer needs.

Wal-Mart has shown some fatigue in the past year:

• Stock price has been relatively flat despite strong topline growth over the past 6 years
• Overall growth has slowed as well
• Last year Wal-Mart had single digit growth of 9% for the first time in their history

Wal-Mart is in a stage of transformation to combat this fatigue. Stephen outlined some of the priorities that they will be emphasizing in the “new” Wal-Mart that we will see in 2007

• Priority on serving customer needs - “Whoever is the best at putting the customer in charge, makes all the money”
• Offering more opportunities to working families they employ
• Be relevant in communities they serve and contribute to building a better future
• Evolve brand experience
• Improve in-store experience - Program stores with scalable platforms that will breakthrough with customers

Wal-Mart has identified three key segments among their customers:

• Loyalists – Core customers who spend a large percentage of their income at Wal-Mart
• Skeptics – Shop at Wal-Mart for low prices, but not committed and concerned about company. This segment is not a prime target for them right now, but they hope to positively influence their shopping preferences over time.
• Selective shoppers – This group is the primary target for Wal-Mart because they shop frequently at Wal-Mart, but are only shopping in selected categories. The goal is to show these customers that there is a broad range of other offerings that will meet their standards.

Based on the shopper segmentation, Wal-Mart has identified priority categories where they want to improve their variety and differentiation. A few of them are: Electronics, Pharmacy, Home, and Apparel. These categories are relevant to the selective shopper and will highlight Wal-Mart’s One-Stop Shopping advantage.

In an effort to improve their connection with customers and their communities Wal-Mart has segmented their stores into 6 categories: Rural, African American, Hispanic, Suburban, Affluent and Empty Nester Boomers.

Their goal is to have stores that reflect the community make-up and provide experiences that are customized for specific demographics. Store segmentation has shown very positive early results. A store in Evergreen Park, Illinois that reflects the urban make up of the community has seen sales per square feet rise by 25% compared to other area stores.

Wal-Mart is working to develop a brand promise that will be unveiled in the next few months and guide their marketing and communication efforts. They are not interested in copying others, but continuing to innovate to become a better Wal-Mart.