A Beacon Of Hope

How One Iconic Brand Is Reconnecting With Consumers.

Written Nov 24, 2008, read 135 times since then.

Times are tough for retailers. Iconic brands from General Motors to Sears are struggling to survive. Starbucks posted a staggering 97% decline in the third quarter, and is shuttering 600 locations. Others like former electronics juggernaut Circuit City have already been forced to file Chapter 11. Sales are down at every major US retailer... except for one. Walmart has announced a 7.5% increase in sales for the first three quarters of 2008.

So, what's their secret?

While they're surely benefiting from the new frugality of the US consumer, the cha-ching of cash registers at Walmart can also be attributed to a sweeping brand revitalization initiative launched in 2007. However, that revitalization came only after a hard lesson in branding that the retail giant learned the year before.

In 2006 the company made a critical, and costly, branding error. Frustrated with stagnant sales and a low-end thrift store stigma that didn't appeal to affluent consumers, management leaders at Walmart made the fateful decision to reposition the brand – and discovered the fundamental problem with the idea of brand repositioning: it rarely ever works.

Why They Did It, And Why It Failed

From humble beginnings in 1962, Walmart grew to become the world's largest retailer by smartly positioning themselves as the low-price leader. Since founder Sam Walton opened the first Walton's Five and Dime in Bentonville, Arkansas - and discovered that he could achieve higher sales volume through lower markups - the Walmart brand has boomed by becoming synonymous with discount savings. Today, nearly 100 million customers - almost one-third of the US population - visit a Walmart store in the US each week. These consumers site low prices as the most important reason for shopping at Walmart. The average US Walmart customer's income is below the national average, and an estimated one-fifth lack a bank account. Over the years, facts like these fueled a litany of unflattering stereotypes that diminished the brand and dissuaded upper middle class and affluent consumers.

That's why after nearly half a century as the low-cost leader the marketing team at Walmart decided to scrap Walton's blueprint of reducing costs for working families (and the substantial brand equity that philosophy had created) and reposition the brand to focus on premium items to lure up-bracket clientele. Soon, new Walmart Super Centers - outfitted with wooden floors and wider aisles designed to compete with upscale competitors like Target - featured sushi bars and coffee shops with Wi-Fi internet access. Shelves were stocked with $500 bottles of wine, trendy organic foods, pricey electronics, and other high-end goods. Celebrity endorsements by the likes of Beyonce, as well as glossy ad campaigns in publications such as Vogue, heralded the new upscale offerings.

But shoppers didn't buy it. Consumers couldn't be convinced that Walmart was suddenly a luxury brand, and their traditional customer base - looking for deals on detergent and diapers, and not $500 a bottle merlot - was nonplussed. By seeking to expand into what they perceived as greener retail pastures, Walmart squandered their brand equity and alienated their core consumer.

Breathing New Life Into An Old Brand

Once it was clear that the brand repositioning was failing, Walmart execs gracefully shifted to a revitalization strategy. Whereas brand repositioning jettisons the equity a brand has built, brand revitalization honors that history, and builds on what made the brand great in the first place. Articulating the tenets of the brand in new ways to connect with contemporary consumers is what brand revitalization is all about.

To reconnect with their base demographic, as well as attract new customers, Walmart returned to the promise at the heart of their brand: value. The refocus on value is the result of an economic study commissioned by Walmart and conducted by research firm Global Insight, which showed that the retailer's low prices saved US customers $287 billion last year - or an average of $2500 for each US household shopping at Walmart. After 19 years Walmart retired its "Always low prices." slogan in 2007, and unveiled "Save money. Live better", as it's new tagline. According to Stephen Quinn, Walmart's chief marketing officer, "People know they can save money by shopping at Walmart. The emotional connection was what the savings allowed the family to do."

And, what the savings might allow your family to do is brilliantly reinforced in television advertising. 30 and 60 second spots feature customers pondering whether to spend the money they've saved by shopping at Walmart on cars or family vacations. The ads close with the voice over "Walmart saves the average family $2500 per year. What will you do with your savings?" It's a powerful statement that resonates within Walmart's demographic, and beyond.

Consumers seek security in brands, and at a time when many people are wondering how they're going to pay the mortgage and put food on the table, Walmart's brand actually offers hope - no celebrity endorsements required. It communicates that as tough as things might be, there's still somebody on the consumer's side helping them provide for their family. The resulting emotional connection has had a profoundly positive impact on brand perception. In an economic climate where frugality is the new swank, Walmart is suddenly chic.

A Beacon Of Hope

The renewed focus on the brand promise of making life better, or easier, or more manageable, by providing quality at a value, is also embodied by an updated visual identity, the cornerstone of which is an illuminating new logo.

On June 30, 2008, Walmart unveiled a non-hyphenated letter-mark paired with a stylized "spark". Economy of shape and color make the new logo clean, concise and instantly recognizable. The spark icon conveys a host of positive messages, such as; bright ideas, a brighter day, the light at the end of the tunnel, or a beacon - perhaps even a beacon of hope. Exuberance and optimism burst forth from the vibrant symbol, signaling the brand's positive, affirming attitude. Design critics have criticized the color and font choices, but in this instance those details are more subjective than fundamentally important to the strength of the logo. Overall the entire aesthetic is open, airy, contemporary, and yes, a bit more affluent.

The Moral Of The Story: Seeing The Light

Being flexible enough to adapt to market changes and consumer needs, without losing site of your core values, is what allows a brand to remain relevant and thrive. Learn from the mistakes, and triumphs, of the most successful retailer on the planet: know and respect your consumers, connect with them emotionally, and always honor those connections. Make your brand a beacon, and consumers will see the light.

Learn more about the author, Ken Peters.

Comment on this article

Posted by Ed Sweet, Phoenix, Arizona | Nov 26, 2008

Great article. Sounds like what the Republican Party needs to do.
Posted by Ken Peters, Phoenix, Arizona | Nov 26, 2008

Ed,

Thanks for the comment. Interestingly, research indicates that Walmart customers are overwhelmingly conservative, so perhaps the GOP could indeed take a cue from Walmart :)

Best.
Posted by Kare Anderson, Sausalito, California | Nov 26, 2008

The very scale of Walmart makes their decisions difficult because the effect is HUGE on the makers of many of their products in China, the workers who have lost jobs because of the W. effect and the people who need inexpensive items found there.

Three books with very different takes are well worth reading:

The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy + How Walmart Is Destroying America And The World: And What You Can Do About It + The Wal-Mart Way: The Inside Story of the Success of the World's Largest Company

This is one business that effects every one of us in different ways.
Posted by Ken Peters, Phoenix, Arizona | Nov 26, 2008

Kare,

Indeed, Walmart's operations are fraught with plenty of things that can be criticized, i.e. labor relations, pay and compensation, etc., etc. However, they are many laudable qualities as well. For instance, in the past couple of years they have redesigned and reduced the packaging on many of their private label items, and these redesigns have saved vast sums of money in production costs, not to mention the tremendously positive environmental impact. The company also owns their own electric company that provides power to some of their stores. It's fascinating.

I've chosen here to simply focus on their recent branding efforts as they pertain to identity development, marketing and advertising. Whenever the World's largest retailer redesigns it's brand identity, it's newsworthy. It's even more newsworthy, and relevant to biznikers, when it works so well.

This article could have gone on at much greater depth than the biznik word count would allow. I would have loved to have gotten more critical about their overall operations, and will certainly take a look at the books you mention.

I am not a Walmart defender, nor am I anti-Walmart. My interest is as a brand strategist, and they are an exceptional case study.

Thanks for reading and commenting.
Posted by Kirk Davis, University Place, Washington | Nov 26, 2008

Wow Ken! Great insight into branding. The part of your article that really stood out to me was that Walmart promoted it's real value to the consumer in it's tag line.

When I first became aware of the tagline change to "Save Money. Live Better," I thought it really spoke to the market demand. The value in this case is living better. I think it gives people a reason to shop at Walmart beyond saving money.

The other thing I like about this tag line is how consice it is. Now that they a new focus on "live better," Walmart can open up a whole new marketing conversation with it's consumers because their customers will always want to live better.

When it comes to branding, I ask my clients to think of what they symbolize to their clients. It was so hardwired into us that Walmart symbolized low prices that we wouldn't believe anything else about them. The genious of their new direction is simply adding the value of living better to the equation. So now, because of your article I will ask my clients, what do they symbolize in the context of the value of their brand promise to their customers."

Ken, Thanks for sharing your thoughts on this!
Posted by Ken Peters, Phoenix, Arizona | Nov 26, 2008

Kirk,

You're absolutely correct, the new tagline is fantastic, and your analysis of it is spot on.

Walmart is stepping beyond a mere monolithic brand, and attempting to make itself a critical component in the lives of their customers. The new tagline speaks to that in a very positive, affirming way.

Thanks for sharing your insight.
Posted by Jeff Fisher, Portland, Oregon | Nov 28, 2008

Interesting article. However, no fan of the Walmart business (or their practices) here. I think the new sphincter-like icon and dumbed down type treatment is just another lame recent corporate rebranding effort. I've only been in a Walmart once and the rebranding is certainly not strong enough to get me to visit a store again. Perhaps I'm just not within the target market.

Jeff Fisher | Jeff Fisher LogoMotives | Tweet! Tweet!
Posted by Ken Peters, Phoenix, Arizona | Nov 28, 2008

Jeff,

I've heard a lot of opinions on the new Walmart logo, but you've topped them all with "sphincter-like" :)

Is the logo innovative in form? No. Is it exceptionally creative? No. I'm not particularly knocked out by the blue – I'd have gone a bit darker, at least. And, you're right, the typography is pedestrian. Despite these aesthetic shortcomings, I believe the logo works, for the reasons I've outlined in my article.

Thanks for reading and commenting.
Posted by Jeff Fisher, Portland, Oregon | Nov 28, 2008

I think Walmart, and many of the other highly-visible brands, have taken the easy way out in regards to recent rebrandings. It's as if they are positioning the branding to the lowest common denominator in the marketplace - meaning the least savvy/sophisticated segment of the market. Making use of simplistic, often lower-case type treatments - and then just slapping a generic icon next to the text - really has dumbed down some formerly strong brands. Perhaps with Walmart that does reach their loyal customer-base - with a brand like at&t it almost comes across as insulting in regards to the historical perspective of the brand and the sensibility of a long-time clientele. I was recently asked about such brand "dumbing down" on the radio/podcast programs Inside Digital Design in a segment about my book Identity Crisis!.

Jeff Fisher | Jeff Fisher LogoMotives | Tweet! Tweet!
Posted by Ken Peters, Phoenix, Arizona | Nov 29, 2008

Jeff,

I'm with you on the AT&T logo. I think they made an astonishingly poor font choice. I'm not familiar enough with what they're doing with the rest of the brand to comment on how the logo fits into the grand scheme, but on it's own merit it's weak. If anything, to me at least, it looks like they're trying to glean a little from the former Cingular Wireless logo typography – which might make some sense given their recent acquisition of Cingular. Cingular was a virtually flawlessly executed and astonishingly well thought out brand designed by VSA Partners, but co-opting the look of their logo typography falls flat with AT&T.

I don't believe that Walmart is pandering to an unsophisticated consumer. Their base might be at the lower end of the economic scale, but everyone seeks beauty. Consumers especially seek it in brands, whether they're aware of it or not. The previous brand identity always felt generic to me – a characteristic in any brand which I've always felt is a brush off to consumers. This one is a step in the right direction. The new visual identity seeks to be more contemporary through a more minimal, stylized and cleaner aesthetic. The lowercase type has greater legibility, and is far more friendly and approachable than the monolithic uppercase logo that bore down on consumers previously.

The whole brand seems to be intended to speak directly to their consumer's needs, and become an integral factor in the lives of those consumers by offering a positive, hopeful feeling. While there might be room for improvement in the visual identity, I still think this logo is communicating effectively on behalf of the brand promise/message.

I appreciate your comments. Thank you for adding to this discussion with your insight. I look forward to checking out that audio you provided the link to.

Best.

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