Wal-Mart Readies for Marketside, Smart Marketing

Wal-Mart is gearing up to open its new small-format Marketside grocery stores in southern California and Arizona, while also introducing a new in-store marketing program that offers micro-targeting right down to the store location and category, The Financial Times reported.

The retailer applied for a liquor license for a small Marketside store planned as part of a retail development in Oceanside, Calif., according to The Financial Times. The location is still awaiting planning approval, though planning documents, first reported in the local North County Times newspaper, show drawings of the proposed store with the logo prominently displayed.

The retailer will open the first four of the new small stores in the suburbs around Phoenix, Az., in the coming weeks, largely in communities targeted by Tesco’s Fresh & Easy stores.

Wal-Mart continues to describe its Marketside format as a pilot, though it has indicated in job advertisements that it could open more than 1,000 of the stores and create more than $10 billion in sales if the program is successful.

And as Wal-Mart explores alternative growth strategies in the U.S. as its supercenter growth begins to approach saturation point, The Financial Times also reported the retailer is using innovative in-store marketing to target sales.

It has become the first U.S. retailer to roll out a new generation of in-store digital media technology. The “smart network” will replace traditional in-store televisions with screens that can be individually programmed depending on their location in the store.

The system is linked to checkout data at the stores to provide live analysis of the impact the screen programming has on sales, which would help marketers who have long struggled with how to accurately measure the effectiveness of in-store messaging.

Wal-Mart describes the new system – which will eventually involve 27,000 screens at 2,700 stores – as a “shopper intelligent” network that will deliver relevant information “by store, by screen, by day, and by time-of-day,” The Financial Times reported.

>Rather than playing advertisements and other material designed for TV, it will show customized programming developed by a new media company, Studio2, which will work with leading brands.

The tracking of the relationship between the screens and customer sales data is being provided by DS-IQ, a company launched five years ago by former executives and software engineers from Microsoft and Amazon.

DS-IQ’s CEO Tom Opdycke said the current drive to apply digital technology to in-store marketing is “the next big thing in retail,” with a potential source of competitive advantage that could mirror the way retailers have focused on making supply chains more efficient.

“If you are able to show more relevant content, the screens are not just a source of advertising revenue for the retailers, but they help drive the core business of sales forwards,” he said.

Wal-Mart’s program was developed with $10m of funding from its main advertisers, and is part of a broad push in retail to develop ways of measuring the impact of in-store messages, such as “gaze-tracking” devices and surveillance cameras that track shoppers’ movements.


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