Wal-Mart's Bob Connolly on Effective Sales Promotion

When the Executive Vice President, Marketing and Consumer Communications, for the world's largest retailer, Wal-Mart, says he wants to talk about "Effective Sales Promotion," I'm all ears. And Bob Connolly, who was speaking at the Promotion Marketing Association meeting in March, lived up to the billing. Considering how many shots this column has taken at Wal-Mart over the years, I think a bit of equal time is in order. So here goes:...on Marketing: "We had a good day yesterday -- $461 million with a 10% comparable store increase. Great marketing drove things yesterday. You know what it was? The war started a year ago and people were home watching TV. The great marketing that we had this year was that we didn't start a war. Wal-Mart marketing is mostly about what happens in the store: EDLP. Opening Price Points. Rollbacks. These are all marketing philosophies driven by the customer. Not by the marketing department. Not by the merchandising department."...on Pricing: "The philosophy behind Every Day Low Pricing or EDLP might be a little foreign to you. Sometimes, it's foreign to OUR people. EDLP is an inclusive pricing philosophy. That's the key. Promotional pricing, by its nature, is exclusive. I drink Pepsi. I really don't care if Orange Crush is on sale. I am annoyed if one out of four weeks, I can buy Pepsi at a lower price. Why not all four weeks? You are excluding me from my desire."...on CPG relations: "I don't expect you to agree with me. If you work for Pepsi or Kimberly-Clark, you want [promotional pricing] to get our customers to try your product. I get it. But it goes against our philosophy. No deals. Same thing, every day, every place, everywhere. Does that surprise you? Sound different from what you've heard? I'll bet the philosophy you think we've had is 'Drive Every Price Down as Low as You Can.' Well, that's true too. But the real thing is to make everything available for everyone all the time."...on Seasonal Promotion: "It's Easter, and we'll sell a lot of eggs and coloring books and baskets and all that. But there are other seasons. The NCAA Final Four is the third biggest beer season for Wal-Mart. The Super Bowl is number two, and Halloween is number one. The number one frozen pizza day is the day after Thanksgiving. There are a lot of seasons for Wal-Mart, and they aren't always easy to find. Deodorant has a season, with a little blip in the summer. Dental floss has a season. Dieting has a season -- right after Christmas."...on New Products: "Are there any new items out there? And I don't mean just re-coloring an old item. I am sure that some place in this country, right now, there are merchandising people sitting around trying to figure out the 'trend' in low-carb and where it is headed. We don't really care. We want to go where the customer is going, not take them. We just try to fill the shelves and get out of the way." ...on Mass Media: "Take CSI, a great show. How many households watch that a week? About 14 million, which is a lot. How many transactions did we have yesterday at Wal-Mart? About 17 million. This week we'll have 140 million transactions. There's no TV show, including the Super Bowl or the Oscars, that comes close to that. That's why we're so enamored with the in-store stuff."...on Consumer Insights: "Do you want to know your best platform for researching Wal-Mart? Pushing a cart in the store. And not just 'walking' the store, but going out and buying light bulbs or cosmetics, and standing in line behind customers. We talk to and survey more than 100,000 customers a month, at every store in the chain."...on Display Space: "The hottest category we have right now is nutrition. Even if you aren't in the food category, you should care about this. Here's why: Maybe we don't need 25 facings of window cleaner. Maybe we'll take that space and put it into low-carb diets. We're generalists. So understand that your area may be facing more than just the competition in your category."...on In-Store Brands: "You, in the branding world, determine Wal-Mart's in-store brand philosophy when you leave a void for a value proposition. That's where Ol' Roy started, and Equate and Great Value. We don't have a store brand for men's underwear, for example, because you can't do a price point any better than Hanes and Fruit. However, Levi's would never sell us. We needed to create a value brand, so we bought the name Faded Glory." ...on Retailtainment: "We still believe in it. But it can't interfere with business. Two years ago, the Saturday before Easter, we had the "World's Biggest Bunny Hop." Registers are jammed. Lights are blinking. You can't get checked out, and yet our store managers are flopping around in the front of the store. It doesn't work. A better idea that day would have been simple stickers for two-year-olds."...on Brand Messaging: "What you want to achieve are definitive statements for the customer. 'I always use Tide because it works' is better than 'I always use Tide when it is on sale.''...on Coupons: "Can anyone recommend a good new restaurant in town I can go to tonight?" [A few names are suggested.] "Okay, but can you give me a coupon? Is there a sweepstakes? Anything on sale?'"...on CPG relations: "Rollbacks are our way of passing on to the customer, for a long period of time (but not forever) the better pricing efficiencies we achieve through our distribution. And it's not just, by the way, through negotiation. These rollback prices eventually, sometimes, become the new price. And we understand that it sometimes takes the market down and we're conscious of being careful about not ruining businesses that way." ...on Wal-Mart customers: "Forty-five percent of the people in this country do not have a charge account. They don't qualify. The same 45% can't get enough money into a checking account to have one. Does that surprise you? We don't live in the real world. You may think you live 'paycheck-to-paycheck', but it is for the leased Navigator or an expensive house? It's not, 'How do we feed the family this week?' Donald Trump could shop at Wal-Mart. He's allowed to. And by the way, so are the people who may have served you dinner last night."...on Wal-Mart brass: "Most of us don't live in the real world either. What would you have seen in the parking lot of the Bentonville Wal-Mart 10 years ago? Lots of pick-up trucks -- always. You go in that parking lot now and there have to be 15 Hummers out there." ...on Expansion this Year:50-60 traditional discount stores, all averaging about 110,000 square feet. "We don't open a lot of these smaller stores any longer." 200-230 Super Centers.25-30 Neighborhood Markets.35-40 Sam's Clubs. "Sam's Clubs came back quite a bit last year. We'd only been opening about five of them a year." 130-140 International stores, exclusive of any acquisitions. "We just bought some grocery stores down in Brazil." "We're adding about 50,000,000 square feet of retail space, exclusive of acquisitions."We opened up five [distribution center] warehouses this year. They're all about 1,000,000 square feet. The analysts always ask us: 'What are your expansion plans for this or that part of the country?' The answer is, 'Follow the Warehouses.'"...on Brand Identity: "The American car companies have struggled for years for brand identity. GM, Ford, etc. The one place that they've excelled in the last few years has been pick-up trucks. GM... Like A Rock... Bob Seger. So what happened this morning to GM? They recalled four million pick-up trucks because the tailgates fall off. All this branding that they did -- the stuff you do -- really goes down the crapper when you don't deliver on the brand promise. Like a rock? Great, until the tailgates fall off."

P2PI MEMBERS

JOIN P2PI

You May Also Like

AD Retail Media’s Transition In-House

The Future of Ad Targeting – Why Retail Media is the Solution, Not the Problem