Archive for October, 2007

Wal-Mart Dot Com is Clicking: Soren Mills Speaks

Posted in Blogroll on October 6, 2007 by nmb

Wal-Mart dot com’s vision is nothing less than to “create an integrated approach to reach, communicate with, reward and retain our mutual most valuable customers.” 

An un-miked Soren Mills, VP of Strategy and Business Development for Wal-Mart.com, presented “Driving Multi-Channel Sales” Thursday morning as the latest offering from the Bentonville Bella Vista Chamber of Commerce’s Champion University program for Wal-Mart vendors and service providers.

Mr. Mills has been with Wal-Mart for five years, starting as a GM in health and beauty at Asda (UK) and jumping across the pond three years ago to help build Wal-Mart’s dot com business . . . and build it has.  Wal-Mart’s dot com sales have jumped from $300 million to $2 billion-with-a-“b,” growing at an average rate of 35% each year since 2003, it is the 15th largest site on the internet (jumping to #9 during the holiday shopping season), and the division now supports 600 employees in San Francisco.   Many of the eye charts that Mr. Mills presented were flashed at lightning speed which means that this report may be lighter-than-usual on stats (hey, put those pom poms away!). No great loss since the morning was all about messaging!

Message #1:  We have a lot in commonSo many retailers and e-tailers want you to know just how DIFFERENT their online shoppers are from those who hit the bricks.  We’re to believe that online shoppers are young, rich, aspirational and time-starved . . . how better to justify the higher price points, right?  Hold on . . . Mr. Mills wants everyone to know how SIMILAR Wal-Mart’s online customers are to those who traverse their stores. Yeah, they might be slightly younger (clicks:  43, bricks:  50), slightly higher income (clicks:  $62.6, bricks:  $51.8), a wee bit more educated (clicks:  37% college educated, bricks:  31% college educated) oh, and they are also “more female” (which doesn’t mean that they’re sitting at their kitchen tables wearing heels and lipstick) . . . Bottom line:  There is “lots of overlap” between the two and that spells opportunities for vendors; which brings us to . . . 

Message #2:  Dot com is that rare, sticky brand showcase in a world driven to distractionWal-Mart is on a “dual mission” to drive online and in-store sales synergistically and they’re partnering with vendors to develop creative ways to showcase their brands.  Not a bad idea when you consider the humongous marketing dollars that many Wal-Mart vendors have at their disposal.  Why not take those already-fleshed out campaigns and slap them on Wal-Mart dot com; prettying up the Wal-Mart site and driving brand awareness with those very similar shoppers in the process?  And speaking of brand, more than once, Mr. Mills used the term “brand” to refer to Wal-Mart itself.  He said that dot com gives consumers the opportunity to interact with “our brand” online  . . . did he accidentally leave off the “s”?  I think not.  Pretty radical talk for a retailer sometimes dismissed as a “place to shop” while competitors are given way too much credit for delivering on the store-as-brand promise . . . then again, this dovetails with Stephen Quinn’s foreshadowing a few months ago when he spoke about Wal-Mart realizing its own-brand potential. 74% of online customers browse online then purchase in-store, a dynamic referred to as “influenced sales,” and the average American spends 17% of their media time online.  What a shame then that marketers’ average online spend is only 3% . . . well, not everyone is a dinosaur . . . take the forward-looking mother’s little helper, Alli.  Clickers spent an average of 2 minutes, 11 seconds on Wal-Mart’s Alli brand page; 35 seconds longer than on traditional brand pages   . . . that should be enough to make marketers salivate.  Picture a customer staring at your latest magazine ad for 2 minutes, 11 seconds.  Alli went on to increase its sales above projections and sales were in line with forecast for the critical first two months.  According to Mr. Mills, you can expect consumers to spend an advertising eternity on your own Wal-Mart dot com brand page (that would be 1.4 minutes).  He didn’t say whether obsessive vendor clicks were subtracted; however, surely an impressive number regardless. Okay, you want to be a hard case?  Need some metrics in marketing-speak?  Wal-Mart dot com can increase “unaided awareness” by 76%, “purchase intent” by 63% and the all-powerful “intent to recommend” by 54%. 

Message #3:  Wal-Mart dot com is the “at-home kiosk.”  I’m giving snaps to Wal-Mart’s latest terminology twist.  Reading between the lines, the “at-home kiosk” concept means that Wal-Mart is using dot com to drive traffic to the stores; not the other way around.  Wal-Mart will NOT be putting internet kiosks in stores, instead, they will count on the 77% of Wal-Mart dot com shoppers that have access to broadband (vs. the national average of 61%), making brand connections online, resulting in an uplifting halo effect at the stores.  Dot com; therefore, isn’t just a vehicle for selling products and shipping them to consumers’ homes, it is a brand messaging powerhouse that “completes the (brand awareness) circle.”

Message #4:  “Virtual merchandising” is a whole lot more predictable, and impactful, than the alternativeYour best laid merchandising plans . . . gorgeous planograms, flawless convention-floor product set-ups . . . all for naught as you see your competitor’s products on your fixtures, your stuff on the floor . . . Mr. Mills didn’t go into all of that but I had to based on experience.  Instead, he made a compelling argument for bringing your hottest programs online, using Wal-Mart dot com as your beta and building advanced awareness for those customers that you know will eventually hit the stores.  There, they’ll be able to select from your perfectly-pre-refined assortments. 

Message #5:  Web customers are your BEST customersFurther bolstering his clicks-drives-bricks argument, Mr. Mills told the audience that web-to-store shoppers spend an average of $327 vs. $264 for store-only shoppers.  Beyond that, Wal-Mart dot com’s customers spend 64% more on average than Target’s web-to-store customers.  So, websites aren’t just most retailers’ top “door,” they also have the unique ability to drive sales at additional doors. 

Message #6:  Selling product is the tip of the (web) icebergSo, why do consumers go to Wal-Mart dot com?  The top three reasons according to Mr. Mills are:  1) To conduct product research, 2) To look for store advertising flyers, and 3) To locate the nearest store (so why are store finders always in wee font at the bottom of the home page??)

With that in mind, Wal-Mart dot com has developed several programs, some of which benefit vendors whose categories aren’t even on the site (i.e. food).  How can that be?  Well, if a customer is able to order samples of your product online, check out your latest roll-backs, and visit your brand boutique before even setting foot in a store, that certainly primes the pump, particularly in the ever-distracting mass retail environment.  As Mr. Mills stated, Wal-Mart dot com is the “best time to start talking to the customer” regardless of the product. No doubt, some of the programs that he outlined, such as site to store, are familiar to anyone following multi-channel (naturally, that includes you).  Wal-Mart’s Site to Store program promises free delivery to a Wal-Mart store near you within 7-10 days.  When you pick up the item, bring some extra bucks . . . $60 to be exact.  That’s the extra that you’ll spend once you’re in the store according to Wal-Mart’s research.

Wal-Mart also launched customer ratings, which falls under “syndicated and consumer content” and they are calling out their growing roster of service offerings (custom tires, optical, baby and wedding registry), featuring multiple online brand boutiques, and giving vendors the opportunity to feature their brands and products in several “unique ways” including “digital end caps,” product matching (Gatorade click-throughs on the treadmill page; cosmetics with jewelry), interactive quizzes, and incentives for customers to try products once they go to the store.

Message #7:  Wal-Mart stores are as big as, well, Wal-Mart dot com! One of the trickier pieces of the multi-channel puzzle is that many retailers are using their websites to explode product assortments (ever checked out Target’s online furniture gallery?  Look out Ikea!), and even to venture into entirely unique categories (caskets and fine art at Costco.com anyone?).  Wal-Mart is also expanding its web-unique offerings but as pointed out before, Wal-Mart envisions bricks and clicks working together as a synergistic whole that targets similar customers, going so far as to say that Wal-Mart stores are as big as Wal-Mart dot com. It’s all about having the “right assortment at the right place” whether satisfying immediate gratification or facilitating expanded options; however, the key variable will be associate knowledge.  Wal-Mart stores aren’t even as big as Wal-Mart stores if associates can’t help customers find what they need and facilitate sales, never mind solving the challenge of guiding them toward virtual options.  Mr. Mills stated that Wal-Mart is training associates to do just that, so in essence, the store associate IS the in-store internet kiosk.  To me, that means that vendors should leave nothing to chance.  Take the bull by the horns and factor multi-channel support into your in-store marketing efforts. 

Mr. Mills wrapped it all up by reminding everyone that Wal-Mart dot com is in partnership mode.  They aren’t just doing their own thing and asking people to join in but instead, are building tools with supplier input.  He ran through an enticing roster of new features including CRM applications that will allow suppliers to capture names for their own data bases, “geo targeting” which will allow suppliers to target consumer segments (Hispanic, for example) that will correspond with store traiting, seasonal solutions (everything from cold and flu season to NASCAR), and special projects such as sustainability (check out the impressive “common future” section on the site). Back at the office, I had to sign onto Walmart.com seeking reassurance.  Surely with all of the features and initiatives called out by Mr. Mills, the thing would be a chocolate mess.  Alas!  A highly-navigable wonder was before me.   4.5 minutes and counting . . .

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