Link: Click Here [Note: Print ads debut Fall 2005 - link is to announcement of Wal-Mart advertising in Vogue]
Target: Hip Value Shoppers
Today, the Wall Street Journal and other papers reported that Wal-Mart will be advertising in Vogue magazine, signing an agreement that purchases 112 advertising pages over a two-year period. This move to a fashion-centric, product-centric focus for the Bentonville, Arkansas-based retailer is part of a new marketing strategy implemented by Wal-Mart Chief Marketing Officer John Fleming. Fleming was recruited to Wal-Mart three months ago from Target, where he had spent the previous nineteen years of his career. The Vogue advertising comes on the heels of a significant back to school campaign which featured humor and lacked store shots or Wal-Mart employees – first for the retailer.
Wal-Mart is clearly acknowledging that Target has tapped into a hitherto undiscovered need in the American middle market for design where none before existed. With its unparalleled size and significant cost advantages, Wal-Mart is not unreasonably thinking that it can ‘do design better’ or at least make it cheaper for many customers. At the very least, the thought might be to blunt Target’s advantage in design by showing Wal-Mart also has great fashions and design products and confusing consumers about which retailer is the design leader, thereby returning the focus to price.
Wal-Mart undoubtedly hired Mr. Fleming to bring some Target sensibilities to the chain, so it is hardly surprising that he has done so. But it is a bad move and one which may hurt Wal-Mart more than botched international expansions have in the past.
Why can’t Wal-Mart ‘do’ fashion and stand for design? The answer goes back to brand positioning fundamentals – Wal-Mart has clearly, cleverly, keenly staked out a very simple brand positioning with consumers: Alway Low Prices. Always. This is a simple and relevant brand positioning for a mass merchandiser and Wal-Mart’s industry-leading size and efficiency give it the cost advantage necessary to keep this promise.
Target’s brand positioning is considerably different. It is something like “Design for Everyone”. The value proposition includes price, but the focus is balanced between price and design. This in spite of the fact that both chains derive a significant portion of their revenue from identical brands like Tide, Dove and Colgate. But Target is where you would go to find something like Method (the beautifully packaged home cleaning products that are safe for the environment), a Michael Graves teapot or Mission-style furniture on the cheap.
Target owns this positioning. Anyone who doubts this should consider K-Mart’s failure to wrestle this spot from Target in spite of a groundbreaking partnership with Martha Stewart and her innovative line of products.
So why is Wal-Mart trying to move into Target’s territory? We call this the “Volvo Error.”
Volvo stands for ‘safety.’ Among all the brand in the world, it is possible that no other brand owns a single word as well as Volvo owns ‘safety.’ Yet it is possible to watch Volvo commercials today (and at various other points in the automaker’s history) where Volvo is trying to sell the beauty of the vehicle, performance or even price.
These attempts alway hurt that brand. Always. But they stem from the same bad marketing thinking displayed here by Wal-Mart. One can imagine the boardroom meeting where someone says, “Well, we own safety. We’ve got all those people who care about safety. If we want to increase our market share we need to get some of the people who just like beautiful cars. They’ll still be happy that they got a safe car, but that’s not why they are buying.”
The problem is that when Volvo tries to get these beautiful car buyers by advertising the beauty of its cars, it confuses everyone. And they start to forget why they liked Volvos in the first place.
When Wal-Mart advertises its design sense, it makes the same mistake. It may be true that virtually every household in the country has a Wal-Mart shopper. But those people are going to Wal-Mart to save money. If they wanted to go somewhere to get cool designs on a budget, they’d go to Target. Instead of convincing these people that Wal-Mart can serve their design needs as well, Wal-Mart is just going to confuse them. And then they won’t know why they went to Wal-Mart in the first place.
Branding Bottom Line:
Wal-Mart tries on Target’s suit and looks frumpy.