Even as the economy sinks, sales at Wal-Mart, a bellwether in retail, have continued to grow. To keep it that way, the $379 billion company hopes several new Web 2.0 projects will secure what could become an increasingly illusive consumer dollar.
But Wal-Mart might be going at it the wrong way.
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Prices for products we buy every day are jumping. The Consumer Price Index is riding more than
4 percent higher than a year ago, oil is trading at all-time highs. At gas stations across the U.S., a gallon of regular costs, on average, $4.10.
If people are spending more on basics like food and fuel, they likely have less to spend on impulse and extras. Technology to lure customers to stores, either physical or online, can be a differentiator, says Katie Delahaye Paine, CEO of KDPaine & Partners, a Web measurement consulting company in Berlin, N.H.
Several retailers are stepping up their use of Web technology to make shopping easier or build communities online. For example, JetBlue assigns staffers to chat with Twitter users and post travel news to the microblog service. Starbucks launched a Web site soliciting product and service ideas from visitors, who can then discuss and vote on ideas pitched by others. Costco, already a discounter, offers “treasure hunt” deals exclusively at its Web site, such as the Emergency Food Supply bucket (275 pre-mixed servings for $79.99, gift messaging available).
Now Wal-Mart is pushing into Web 2.0 territory with several initiatives that mix service and marketing under the theme of stretching consumer dollars.
“Push” is the operative word. Paine is unimpressed, saying the retail giant is using Web 2.0 the wrong way: to push its own ideas out, rather than let consumers express themselves and bring new ideas to it.
Wal-Mart offers a widget that you can download to your desktop to display a new tip each day for enjoying summer at home instead of vacationing somewhere else. Recent missives from the “101 Days of Summer Staycations” widget (get it? stay-home vacation?) include directives to hold a luau (and buy a $298 grill), let the kids camp in the yard (and buy a $14.83 sleeping bag), and, for kicks, take your dog to work (and buy $7.88 designer leash).
Product pitches don’t accompany all the advice. Tips about capturing summer memories in a scrapbook and taking your children to the library, for example, stood alone.
In May, Wal-Mart started a Web site called “Savemore” where visitors can register to submit money-saving tips and read those left by others (redeem soda cans for money back, buy dishtowels at yard sales). Podcasts from financial planner Ellie Kay talk about following a budget and changing your car’s oil filter to conserve gas. Kay held a live chat in June covering similar topics.
Two Wal-Mart spokeswomen declined to talk about the company’s intentions in developing Web 2.0 technologies or its metrics for measuring the performance of the widget and Web site. Rockfish technology director Jerry Osmus, who worked in IT at Wal-Mart from 2001 to 2006, didn’t return a phone call requesting an interview.
Paine’s assessment of Wal-Mart’s approach to these techniques is that it’s more about disseminating marketing information rather than starting electronic conversations that lead to customer loyalty or a good corporate reputation online. Wal-Mart has lost its technology edge, according to some analysts and last year rolled back its expectations for RFID.
Recent reviews of Summize, which is a searchable index of Twitter conversations, and of Google Blog Search, which allows searches of keywords that appear in blogs, show that Wal-Mart’s widget and “savemore” Web site aren’t generating much buzz, Paine says. She says she is not working with Wal-Mart and has no inside knowledge of the companys online strategies.
From a marketing perspective, she sees the retailer’s use of Web 2.0 technology as “not really a listening device,” she says. “It’s a pushing device. It’s a yelling-ever-louder device.”
In May, Wal-Mart filed for a U.S. trademark on “staycation.” The application is pending.