Shoppers used to navigating displays of paper towels and pillows will soon find a whole new distraction at Wal-Mart Canada Corp. — and it won't be on the shop floor.
Next month, Wal-Mart is installing 46-inch and 32-inch LCD ceiling-suspended screens throughout its stores, showing commercials touting a wide array of products carried on its shelves. The sound volume will be adjusted to the level of a store's background music. And the message will range from how to use a product to where to find it.
Using digital media to sell more goods isn't new. But Wal-Mart is taking the global trend and putting its own stamp on it. Each store can tailor its message to its local clientele. Each department can customize it to its own product offerings. And Wal-Mart will use it to broadcast its own corporate story.
The medium can be so powerful for advertisers that last year Gillette Co. ran its first TV ad for a new women's razor only on Wal-Mart TV, where it already operates in the parent's U.S. stores.
“It's arguably going to be the largest television network station in Canada,” said Marnie Boucher, co-founder of ShopCast, which is providing the service for Wal-Mart. “It's a paradigm shift in the way media buyers need to think about conventional television. It's a whole new medium.”
One million customers shop at Wal-Mart's 273 Canadian stores and six Sam's Club discount outlets every day. Narrowcasting to this captive audience has the potential to essentially bring back a mass audience that marketers were once able to reach relatively effortlessly with network television, some industry observers said.
Even some advertisers whose goods aren't in Wal-Mart may one day consider pitching their wares on the stores' monitors, they said.
The TV initiative will be launched next month at Wal-Mart's first three supercentres, which carry a full array of groceries along with all of the discounter's regular products and services. The screens will be added to most other stores by next year.
“We feel that Wal-Mart TV is especially relevant to what we call the ‘first moment of truth' when our consumers are choosing which brands to purchase,” said Joyce Law, a spokeswoman for Procter & Gamble in Canada, the country's largest advertiser.
P&G, whose goods include Tide detergent and Pampers diapers, has put a lot of emphasis on pitching to consumers at that “first moment of truth,” she said. P&G has shifted spending to shelf displays and other in-store marketing because consumers are making more decisions right in the store.
Digital television isn't new for retailers, fast food chains and gas stations. Some carry messages for only their own products, while others and run paid ads from suppliers. But the advent of such a large player as Wal-Mart stepping into the arena brings the advertising medium to a whole new level, said Howard Lichtman, president of marketing consulting firm Lightning Group, which has an interest in another digital television concern.
The Wal-Mart effort will spur more advertisers to look seriously at the in-store ad medium, he predicted. They will be able to measure sales lifts prompted by the ads. He pointed to data from the largest convenience store operator in Britain, which found sales rose an average 10 per cent after products were advertised on the in-store screens.
For Wal-Mart, the TV will be a new revenue generator that probably will go right to the bottom line, observers said. It doesn't provide the figures, but in the United States, it is estimated that Wal-Mart takes in millions of dollars a year from advertisers. They will be asked to pay less than half the cost of trumpeting their products in national network television ads, Ms. Boucher said.
Research from a pilot project showed that customers responded favourably to the TV programming, and found that it created a “more pleasant shopping experience,” said Mike Dombrow, marketing director at Wal-Mart Canada. The TV content is designed to be relevant to the local shopper, he said.
Each store will have 15 to 20 screens at the checkouts and in high-traffic sections such as fashion, groceries and electronics. The monitors at the checkouts will be smaller — 32 inches — and carry more in-depth information. That's because shoppers will be standing still at the checkout, while they tend to just glance at the screen when they're browsing the store.
Commercials will be 10 to 15 seconds each, shorter than the 15- to 30-second spots on conventional television, he said.
Hugh Dow, president of media buyer M2 Universal, said that it represents an opportunity for advertisers to connect with consumers, although it won't necessarily be a replacement to conventional TV. “Clearly Wal-Mart has the customer base to make this something that has some critical mass.”
Doug Checkeris, president of Media Company, added that advertisers may shift spending to the screens from other in-store marketing programs, such as displays or flyers. But he cautioned that not all Wal-Mart shoppers will look at the ads on the screens. “Do I think this is a slam dunk? Not necessarily. I think it's a very powerful opportunity. But it takes time to define how it will be used and how it will fit into the mix. That will be the challenge.”
