Walmart Introduces Smart Network
By Tom Ryan
In a live simulcast between New York City and Bentonville, Walmart executives on Wednesday unveiled Walmart Smart Network, described as the first “shopper-intelligent network at retail.” Launched in front of hundreds of vendor executives at both locations, Walmart is hoping to galvanize the marketing community to fully support this emerging in-store media.
Developed after two years and $10 million of R&D with participation from leading advertisers, Smart Network consists of “Welcome Screens” for customers walking into the store; “Category Screens” delivering more-focused messages in the core departments (grocery, health & beauty and electronics); and “Endcap Screens” directly advertising items displayed in key endcap displays. Networks are rolling out in eight major markets this weekend with the majority of stores converted by November 2009.
Walmart execs stressed how “Smart Network” differs significantly from Wal-Mart TV Network, the original name for Walmart’s web network of entertainment-infused programming that started in 1998. Wal-Mart TV broadcasts previews of soon-to-be-released movies, snippets of sports events and rock concerts and corporate messages.
By comparison, Walmart Smart Network is purely focused on providing shoppers with “relevant and useful information.” The technology deploys 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.”
For instance, the network can show promotions based on weather conditions. Soup may be promoted if it’s raining outside the store, said Clint McClain, Walmart’s senior director of emerging media. Ads may promote barbeque items if it’s going to be eighty degrees on Saturday. Promotions might also be arranged around local events, such as a nearby college football game. The network also offers different items depending on the time of the day. For example, promoting frozen pizza at 5:00 p.m. has already proven to be a big winner with moms looking for an easy dinner for their kids. At 10:00 a.m., the ads showed no lift.
Mr. McClain likened this greater promotional flexibility to how “umbrella stores suddenly pop up” when it rains in New York City.
“We want that relevance in the store to have what you need when you need it,” said Mr. McClain.
Although the messages are much more focused around driving purchases than Walmart’s former TV Network, he stressed that messages are not overly employing hard-sell tactics. “If done right, they’ll seem like a timely suggestion,” Mr. McClain said.
Indeed, Stephen Quinn, chief marketing officer, Walmart Stores U.S., said the group developing the project made sure the network was “value-added” for consumers. “[Consumers] tell us they want more direction,” said Mr. Quinn. To prevent the ads from being annoying, the length of the messages is purposely kept short and continually changed up. The sound around the messages is modulated and speakers are directed so only the person viewing is hearing the message.
“Do you know how I really know they’re not annoying? Our associates haven’t be been complaining,” Mr. Quinn half-joked. “They would certainly complain if it was annoying.”
For brands, the key advantage is being able to reach Walmart’s more than 140 million weekly customers directly at “the moment of truth,” according to Mr. Quinn. Brands can also easily measure the success of in-store initiatives. So far, brands participating in the programs in tests have received a boost of 20 percent to as much as 80 percent. But Mr. Quinn admits that the one hurdle to success is whether the marketing community – including brand managers, advertising agencies, and researchers – will embrace in-store as a major advertising medium. Likening in-store TV media’s state to when television first was invented, he’s looking for the quality of creative around in-store media to rise to where TV is currently.
“If we don’t get the content, it won’t be as special as it should be,” said Mr. Quinn.
Discussion Questions: What do you think of Walmart’s Smart Network? In particular, what do you think of its focus on providing shoppers with “relevant and useful information” compared to its past in-store network focus on entertainment and corporate messages?