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Smart Network will need brilliant proof of ROI


As I listened to Wal-Mart chief marketing officer Stephen Quinn the other day, I couldn’t help but wonder how many people in the audience, especially the countless rows of New York-based media buyers, were new to the Wal-Mart way. Drinking the Bentonville Kool-Aid, as they were about to find out, is how most senior Wal-Mart leaders have risen through the ranks. And Quinn is no exception.

“It feels great to save people money so they can live better,” said Quinn, citing the now-ubiquitous marketing mantra to start his hour-long speech about the ins, outs, ups and downs of the new Wal-Mart Smart Network (see related story on p. 1). “In all my time as a marketer, I’ve never seen consumer beliefs and brand values come together like they are right now at Wal-Mart.”

If Quinn’s intro, like the presentations that followed it, sounded at times more like a sales pitch than an information session, there are two very good reasons. The first, and most obvious, is that it was presented by a team of world-class marketing experts—a group whose DNA is hard-wired so that nearly everything they do and say comes across as a well-rehearsed, polished presentation. Quinn himself joked during his description of his team, “At Wal-Mart marketing, we never guess.”

The second, and most important, reason that Wal-Mart’s presentation of its new Smart Network had all the trappings of a well-coordinated sales pitch is that it needed to.

For all the positives that come with this new network—and there are plenty—there is no shortage of risks and obstacles that stand between the promise it is today and the reality it could be tomorrow. First, there’s the question of the hardware installation, a process that will likely be both costlier and more time consuming than an early model could predict. Then, you’ve got the consumer research, which is never as effective in a lab setting as it is in store. Can anyone really guess how the millions of U.S. women who make up the core Wal-Mart shopper demo will react to a barrage of info and promo signage?

But the crux of the matter—the key to the Network’s success—lies in the hands of Wal-Mart’s vendors. As the company, and the industry, learned through its lessons with RFID, you can push, prod and cajole, but ultimately you can only lead a horse to water. As was the case with RFID (where an immediate lack of measurable ROI for the vendor community kept it from becoming the true revolution it set out to be) the new Smart Network will need buy-in from vendors if it is to revolutionize media spending, as many have suggested. And the quickest, surest, most reliable means of getting buy-in from suppliers (and their media partners) is by proving that their Network dollars will not only produce a return, but a measurable return.

As part of Quinn’s presentation Wal-Mart spoke of a detailed reporting process in which one’s in-store ad spend could be tracked and measured so that figures—not Kool Aid—would guide a supplier’s media-spending decisions. This reporting process, otherwise known as proof of ROI, is the lynchpin to the success of the Smart Network.

If those reports do indeed come to fruition, Quinn not only can pat himself on the back, but he can rename the project The Very Smart Network—without running the risk that it will come across as just more marketing jargon.

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