Revitalize Your Brand, Don't Reposition
By Ken Peters
Times were tough for retailers in 2008. Iconic brands from General Motors to Sears were struggling to survive. Starbucks posted a staggering 97% decline in the third quarter, and shuttered 600 locations. Others like former electronics juggernaut Circuit City were forced to file Chapter 11. Sales were down at every major US retailer... except for one. Walmart announced a 7.5% increase in sales for the first three quarters of the year.
So, what was their secret?
While they were surely benefiting from the newly forced frugality of the US consumer, the cha-ching of cash registers at Walmart could 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 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 Repositioned The Brand, And Why It Failed
From humble beginnings in 1962, Walmart grew to become the world's largest retailer by effectively 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 in calendar year 2006 - 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 was brilliantly reinforced in television advertising. 30 and 60 second spots featured customers pondering whether to spend the money they've saved by shopping at Walmart on cars or family vacations. The ads closed 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 were wondering how they were going to pay the mortgage and put food on the table, Walmart's brand actually offered hope - no celebrity endorsements required. It communicated that as tough as things might be, there was still somebody on the consumer's side helping them provide for their family. The resulting emotional connection had a profoundly positive impact on brand perception. In an economic climate where frugality was the new swank, Walmart was suddenly chic.
Seeing The Light
The renewed focus on the brand promise of making life better, or easier, or more manageable, by providing quality at a value, was also embodied by an updated visual identity, the cornerstone of which was 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 made the new logo clean, concise and instantly recognizable. The spark icon conveyed 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 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 was open, airy, contemporary, and yes, a bit more affluent.
The Moral Of The Story
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.
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Ken Peters is Co-founding Partner and Creative Director of Nocturnal Branding Studio, a full-service branding and design agency located in Phoenix, AZ. He's been known to design for everyone from Silicon Valley giants to start-up cat toy manufacturers. His work has garnered him everything from a host of awards to a grateful kiss on the cheek. He also makes a mean teriyaki chicken dish, but it hasn't earned any awards. To talk to Ken email him at: ken@nocturnaldesign.com
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