Walmart Gets 'Smart' About In-Store TV

By the end of 2009, Walmart will no longer operate an in-store TV network that plays brand messages and measures effectiveness based on viewing impressions.Instead, the nation's largest retailer will operate the Walmart Smart Network -- "one of the most innovative customer contact systems anywhere," according to chief marketing officer Stephen Quinn -- which will deliver targeted, shopper-relevant content and be judged by the sales lift it generates.Source: WalmartPerhaps more importantly, Walmart will treat the revamped network not as a stand-alone medium, but as a key platform for developing integrated marketing programs involving pricing, merchandising and media advertising that now are the blueprint for the chain's collaborative efforts with product vendors, according to senior vice president-marketing Steve Bratspies."The model works best through fully integrated programs," said Bratspies, speaking in Bentonville, AR, on Sept. 3, as Walmart officially unveiled the Smart Network to brand marketers and agency representatives at a two-city event. Any vendor that participated in the chain's Earth Month, "American Summer" or "Hannah Montana Headquarters" campaigns in 2008 is sure to confirm that "spending paid out," he offered. (See Related Articles for details on all three efforts.)Bratspies, Quinn and senior director of emerging media Clint McClain used a lot of superlatives while unveiling their plans for the network. Walmart is "reinventing" the "strategies and tools of partner marketing," said Quinn, who spoke to industry executives in New York. Bratspies even suggested that the network could be "the future of media." At the very least, the Walmart Smart Network appears to be the most intelligent, intuitive deployment of in-store media as yet undertaken, and a far superior communication tool than Wal-Mart TV has been. Now, Quinn admits, the chain needs to get potential advertisers to agree that it will be worth the cost.Quinn concluded his remarks by asking Walmart's product vendors to "invest in mastering this new communication vehicle -- not only by participating, but by using your communications and research capabilities to get great at selling and building your brands at retail."Sales forces at vendor companies already know what a powerful communication vehicle Walmart stores can be, Quinn said later. The chain now must also engage marketing departments and research teams, along with their partner advertising and media agencies, he said.Network OverviewOf course, the first step will be to install the network, which will involve replacing Wal-Mart TV's existing infrastructure. Efforts begin this month, when the Smart Network will be added to newer supercenters that do not have the old system.About 300 supercenters will be functional by Nov. 3 (in time for the holidays), and 2,500 locations should be outfitted by November 2009. The ultimate goal currently is 2,700 stores, which will be achieved by early 2010. (The network has potential for future applications in other store formats, McClain said.) During the rollout phase, ad programs on the old and new networks will operate in tandem.In comparison with Wal-Mart TV, the Walmart Smart Network features enhanced screen placement (primarily at eye level), advanced internet protocol delivery technology, and a more sophisticated content platform that strives to present "shopper-intelligent" information rather than pure entertainment or standard ad messages, McClain said. "You're not going to see news programming," Quinn noted. "That's not why people go to Walmart."The Smart Network has three components:1. Welcome screens. Each store will have a 57-inch screen inside its two entrances, "just beyond the decompression zone," McClain said. The soundless screens will display the time and local weather, and will be used to promote new products ("In Store Now"), meal ideas, price "Rollbacks" and other special offers -- all in five-second increments.The content will be targeted by store location, day and daypart, and tailored to reflect local events (like a local college football game), to be more relevant for shoppers. As an example, an offer for prepared pizza and Coca-Cola "makes a lot of sense at 5 p.m." but doesn't resonate as much with morning shoppers, McClain noted.Visuals will conform to a consistent template so that shoppers can learn how to digest the information, but "branded content fits nicely inside the matrix," McClain said. (See "Welcome" video at right.)Five-second spots running every two minutes for two weeks on the full network will cost $80,000.2. Category Screens. Stores will carry two 57-inch screens at eye level in the grocery department and one screen in the health & wellness section near pharmacies. The program also includes content on 30 or more HDTVs in electronics departments.The audio-enabled screens will present category-specific messages related to price offers, shopper "solutions" and seasonal themes. The audio will be modulated to better attract attention. Distinct sound mnemonics will be used to alert shoppers that Rollbacks and other offers are coming next. The "best" spots contain a product shot and a price point, McClain said, adding that, "if done right," a branding message can be presented as a helpful tip. (See 'Category" video at right.)Ten-second spots running twice every six minutes on the full network will cost $50,000 per week, with time sold on the grocery screens in two-week intervals and on the health & wellness screens in four-week blocks. On the TV wall, 30-second spots running three times per hour over four weeks will cost $172,000.3. Endcap screens. Walmart is taking "one of the most potent selling tools" in the store "to the next level," McClain boasted, by attaching 14-inch screens to shelves on three endcaps in grocery (two for food/beverage and one for household chemicals) and two in health and beauty (one for health & wellness and one for OTC).The screens will run up to two minutes of content about a specific product, but in 15-second increments that all end with a call to action. (Watch "Endcap" video above.) Touch-screen technology can be used to provide additional information if necessary. "Think of it as an in-store demo," McClain said.In tests, the video-enabled endcaps consistently generated incremental sales lifts of at least 20%. McClain advised, however, that the screens won't overshadow Walmart's standard merchandising strategy: prospective advertisers must first "earn the endcap" by negotiating a compelling price offer with their Walmart buyer.Advertisers must also be willing to pay handsomely for the medium: The endcap slots will sell for $325,000 per two-week cycle in grocery and $650,000 per four-week cycle in HBA when the full network is installed. (See rate sheet at right.)One media opportunity that isn't included on Walmart's new menu are the checkout TV screens operated in 600 stores by longtime partner Premier Retail Networks (which also will manage the new system). Content on checkout screens will incorporate the "look and feel" of the Smart Network, but the medium operationally will continue "as is," according to PRN president Richard Fisher.The Smart Network concept is based on two years and $10 million worth of research and development involving PRN (which has managed Wal-Mart TV since its inception), digital signage data firm DS-IQ, and key product vendors. Walmart first announced plans to overhaul its network in fall 2006. (See "Wal-Mart Plans 'Endcap TV'" in Related Articles.)McClain called the system's unprecedented data collection and analysis capabilities the "coolest part" of the program. DS-IQ will handle response measurement, analytics and message optimization technologies. All ad buys will include a Campaign Scorecard measuring performance within four weeks of their end dates.Custom content development will be handled by Studio2, an agency formed exclusively for the task by executives from Walmart's ad and media shops, The Martin Agency and Mediavest.Quinn acknowledged that effective use of the Smart Network will require brand marketers to employ a different communication strategy involving a deeper understanding of shopper needs and, quite possibly, a less overt brand message. But the opportunity to influence the purchase decisions of 140 million weekly shoppers should be make the effort worthwhile, he suggested."There are literally a billion moments of truth in our stores every week -- the instant where a shopper considers your brands in order to make a purchase decision," Quinn told attendees. "It's in these moments that we find the ultimate opportunity to provide a new kind of relevance -- when she needs it most -- to help her shop smarter."Procter & Gamble, GlaxoSmithKline, Reckitt Benckiser, Bayer Healthcare and Cadbury Adams reportedly have already signed on as charter advertisers.Walmart 'Smart Network' Press ReleaseBentonville, AR – In a live event, simulcast between New York City and Bentonville, Arkansas, Walmart executives today unveiled the new Walmart Smart Network that will provide shoppers relevant and useful information via in-store TV.The first “shopper-intelligent network at retail” is the result of two years and $10 million in research and development used to identify the optimal locations, applications and programming for reaching the millions of consumers who visit the retailer’s stores each week.Walmart is the first retailer in the US to rollout a next generation retail media network that is supported by a flexible, open enterprise platform powered by Internet Protocol Television (IPTV) – technology that will allow the retailer to monitor and control more than 27,000 screens in more than 2700 stores across the country.The Walmart Smart Network will also deploy response measurement and message optimization technologies to enable delivery of the most relevant content to shoppers - by store, by screen, by day and by time-of-day. All of the content on the Walmart Smart Network will be customized, designed to deliver helpful product information to consumers at the point of decision when and where they need it in the store.“We’ve built a network tailored to the way consumers shop our stores – delivering helpful, custom, content closest to the point of decision – that helps them shop smarter,” said Stephen Quinn, chief marketing officer, Walmart Stores, U.S. “The Smart Network is intelligent too, because every screen and every message has a purpose and we will be analyzing point of sale data on an ongoing basis to deliver a shopper-centric communications platform. In short, the Walmart Smart Network is a win-win: improving the shopping experience for our customers and driving results for our supplier partners.”Walmart will work with the following companies to implement the new network: Custom programming on the new network will be provided by Studio2, a newly formed company led by key advertising executives who are experts in in-store communications and were involved in the development and testing of the new network. &nbsp Network operations, implementation, advertising sales and HDTV wall programming will be provided by Thomson’s Premier Retail Networks (PRN), Walmart’s current partner for these services. &nbsp Response measurement, learning, and message optimization technologies will be provided by DS-IQ, which supplied analytical insights for the network pilot last year.“I am incredibly proud of the partners who have joined us in this new venture,” said Clint McClain, senior director of emerging media for Walmart. “We have tested the new network extensively over the last two years and these partners have demonstrated best-in-class ability to engage shoppers with custom content, to manage a reliable and intelligent in-store network, and to deliver analysis that can power ongoing learning and optimization for our customers and partners.”The Walmart Smart Network will begin rollout in September 2008. Upon arrival in the first stores later this month, the new network will deliver messaging at the entrance of Walmart Supercenters on “Welcome Screens”; in the departments that shoppers visit most often on “Category Screens” in grocery, health & beauty and electronics; and on “Endcap Screens” that will advertise the items displayed on key endcap displays throughout the store.“One of the biggest challenges you face as an advertiser these days is really understanding your target audience in such a way that you know the best place to connect them with your message so that it can have the most impact,” said Kim Miller, vice president of marketing at Kellogg. “I believe moving forward, advertising at the point of sale will become increasingly important to win the market. The results we’ve seen during tests of the new Walmart Smart Network have been impressive."Walmart anticipates that the chain-wide deployment of 27,000 screens and its new Walmart Smart Network will be completed by early 2010.

Walmart Gets 'Smart' About In-Store TV

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