Remember the old Saturday Night Live skit in which Lily Tomlin's Ernestine the operator snorted, "We don't care. We don't have to. We're the phone company."?
 That's what I think of whenever I shop at Wal-Mart and reaffirm my belief that the world's largest and most successful retailer stinks as a visual merchandiser.
Please don't misunderstand me. Wal-Mart is the greatest merchandiser on the planet. It's the expert on what product, and how much of it, to buy. It knows when, where, and for how long to stock an item. And it knows better than anybody what price to charge.
It's the "visual" area where Wal-Mart is lacking.
While other retailers devote substantial resources to creating a conducive atmosphere for shopping, complete with comfortable surroundings and pleasing imagery, Wal-Mart is the personification of "organized chaos." Ever try to navigate a cart through a Wal-Mart at 1 p.m. on a Saturday? You've had less frustration, and fewer traffic snarls, driving home from vacation on Labor Day. And you only learn a store's layout through repeat visits -- maze rats get better directions, and they don't have their paths blocked by half-pallets and four-ways.
The chain's infamous restrictions on branded messages are designed to ensure that pricing is highlighted and its own brand reigns supreme -- not to create visual consistency or "atmosphere." Its stringent rules for vendor-supplied displays are aimed more at improving operational efficiencies than enhancing the shopping experience.
As for in-store events, the company that once applied for a trademark on the term "retailtainment" gets an "A" for intention, but an "F" for execution. Some of this year's more unique marketing concepts (Kraft Foods' X-Men scavenger hunt, Campbell Soup's Guinness Book record-breaking soup giveaway) have been conducted at Wal-Mart -- but often by the proverbial blue-haired lady behind the card table.
Sometimes, it seems like they don't even care about the store environment. But they don't have to. They're Wal-Mart.
Sometimes, it seems like they don't even care about the store environment. But they don't have to. They're Wal-Mart.
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On Aug. 26, New Line Home Video released the highly anticipated The Lord of the Rings: The Two Towers. Seemingly every retailer in the nation advertised the product's availability. Some held special events. Many tied in with New Line's promotional partners for sales incentives, offering $5 off with the purchase of Duracell batteries and/or free Dr Pepper/Seven Up products.
Wal-Mart dispensed with any special activity. It simply placed half-pallet and pallet displays in high-traffic locations and offered the video at an "Every Day Low Price." By the end of the first day, displays in stores visited by staffers of the In-Store Marketing Institute were nearly empty. (See the first picture at left).
We checked a lot of stores that day -- supermarkets, drugstores, other mass merchants. In nearly all cases, the chains that had spent the money to advertise, and had taken money from tie-in brands to fund promotions, did little to finish the job in-store. The product often was stocked in obscure locations, and the promotional offers largely were unavailable. (See the second and third pictures at left to compare how Kmart advertised and executed its program; also compare the stock level of Kmart's display with that of Wal-Mart's.)
So those other retailers get the same grades: "A" for intention, "F" for performance. However, unlike Wal-Mart, they can't afford to fail on the execution end, especially since that's the one place where they can beat Wal-Mart. A store with an eye-catching display of videos, batteries and 7 Up bottles near the entrance -- with a rebate offer that reduced the price below Wal-Mart's EDLP -- might have coaxed at least a few shoppers into buying there.
The price war already has been won. So has the merchandising war. Wal-Mart is going to have more of the items people want, at better prices, than any other retailer. But a store that can stay somewhere close on price while providing a better shopping environment can maintain an edge.
Wal-Mart typically doesn't stink at something for too long before learning how to be good at it.
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Target understood this and exploited it (although its pseudo-upscale environment doesn't play to mainstream America as well as Wal-Mart does with its Heartland image). Kmart ignored it completely and suffered accordingly. Meijer (fourth picture at left) has come closest to bettering the Wal-Mart model by delivering low prices and product variety while providing a comfortable -- even enjoyable -- shopping experience (although recent layoffs suggest the private company isn't on par in terms of operational efficiency).
Those are full-blown competitors. There's no reason why supermarkets, drugstores, department stores and other retailers can't follow suit. Look at H.E. Butt, the Texas grocer who developed a format that thrives even when located across the street from Wal-Mart stores. (Called Central Market, it offers lots of fresh food, and delivers it with loads of ambience.)
Most brand marketers are willing partners. Procter & Gamble develops merchandising programs that enhance the store environment. Kraft Foods has become a master of account-specific marketing that gives each retailer a truly unique sales pitch. The opportunity is there. It just has to be executed.
Time is probably short, however. Wal-Mart typically doesn't stink at something for too long before learning how to be good at it. If it ever decides to add a little "visual" to its merchandising, it will never again have to care about competition. 
Peter Breen is Managing Director of Content of The In-Store Marketing Institute, a membership-based think-tank serving brand marketers, retailers and in-store marketing professionals. The Institute offers members access to information, strategies, knowledge and resources through educational events, publications, tradeshows and a data-driven website. For more information, please visit: http://www.instoremarketer.org
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