Brands still mean something at WalMart

by Tony Fannin, President, BE Branded

Here is an interesting, real-time case about the power of brand. WalMart started to slim its shelves of brands across the board and began only carrying a few different brands, including their own Great Value brand. They believed that people really didn’t care what trash bag they bought as long as the price was low. Their goal was to streamline their shelves and reduce the SKU’s – betting on America not really having any brand loyalty. They were wrong.

In early March, WalMart began restocking their shelves of brands they thought consumers didn’t care for. There was such an outcry that shoppers yelled with their wallets. WalMart posted a decline in earnings the last two quarters. Their decision to pull well-known brands off the shelves contributed to that decline. As an example, WalMart  carried only S.C. Johnson Ziplock bags and their Great Value brand bags and pulled everyone else off the shelves. The consumer revolted by reducing their shopping at WalMart and sourcing their favorite brands somewhere else, while at the same time, picking up additional items that could have been purchased at WalMart. As a result, Clorox (Glad Bags) and Pactive (Hefty Bags) were put back on the shelves. Overall, they have put back over 300 well-known, and wanted, brands back on the shelves.

Brands count and matter, even when consumers say the opposite in surveys. What they buy speaks much louder than their words. Well-known brands have created a trust, an image, and most importantly, an emotional connection that is beyond logic. It’s not much different when we find our life’s partner. Love is anything but logical. If we committed to only things that made sense, then we would pick our mates strictly on a basis of stats, disregarding any emotional appeal, visual appeal, or just basic compatibility.

Brands are no different, but the caveat is you must be a well-known brand to have that much emotional pull. If you aren’t, then who cares if your products disappear off the shelves? If you fill no real emotional need or want, you are easily replaced with the next in line. It’s not about price point either. Is Hefty Bags any cheaper than WalMart’s Great Value bags? If customers wanted cheap, then WalMart should only stock their Great Value brand, but consumers want something more than just bottom-line price. They want to feel something about what they are buying. Purchasing is an emotional activity.

Brands also have a halo effect. They lend credibility and visibility to new or existing items just by being around them. WalMart forgot their roots for a moment. Their core purpose is to provide “brand names” at a discounted price, not  generic items at a discounted price. Anyone can give you generic items, cheap. It takes a smart company to deliver brands inexpensively.

As I’ve said before, be somebody to your customers or be a commodity (and get your butt yanked off the shelves). WalMart provided another example of that point.


About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.

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