Is Walmart’s Reinvigorated EDLP Strategy Neglecting Hispanic Audiences?
Walmart's Every Day Low Prices (EDLP) policy is having a clear impact on advertising in multicultural media. The Bentonville, Arkansas, retail giant is scaling back TV advertising, newspaper circulars and in-store displays in an effort to refocus on EDLP. What Javier Delgado Granados, Multicultural Marketing Director at Walmart and Hispanic media executives have to say.
Javier Delgado Granados, Multicultural Marketing Director at Walmart, tells Portada that Walmart has reinvigorated its focus on EDLP and that this has the following implications for advertising: "Operating under this model affects all we do at Walmart, including how we negotiate with our suppliers, how we advertise and how we go to market with price. In comparison to last June, we’ll run roughly half of the number of circulars. At the same time, the items and prices that are highlighted will last two weeks vs lasting one week. We’re focused on long-term loyalty, not a weekly sale." Delgado's comments refer to Walmart's newspaper advertising in general, but Hispanic newspapers have also been hit. (Check out our exclusive interview today with Trevor Hansen, CEO of EPMG, the firm that places Walmart circulars in Hispanic print media).
In comparison to last June, we’ll run roughly half of the number of circulars.
Delgado adds, however, that digital media expenditures are increasing. "We’ve also increased our digital spend - serving solutions to customers we know are looking for particular products while searching and shopping online." "Our intention is to follow the customer and the General Market and Multicultural media behaviors are shifting dramatically," Delgado concludes.
Newspaper Inserts have been a popular vehicle for big box retailers, especially when they are placed in large circulation home-delivered newspapers. Martha Kruse, Multicultural Marketing Director at Rooms to Go, tells Portada that she thinks that "the home-delivery distribution method of Hispanic newspapers can be very powerful." Rooms to Go places English-language circulars in many Hispanic newspapers including Al Dia de Dallas and La Voz de Houston.
Hispanic Publishers to Walmart: Listen to your Regional Marketing Managers
Now Hispanic newspaper publishers are encouraging Walmart to bring the creative process and media planning to second and third tier suppliers who are on the ground and understand how the communities engage with print and their brands.
"If Hispanic market is one of their main goals, we hope Walmart will start applying their own retail strategy, visit their stores and listen to employees and local stores managers to media and go and visit the publications and the organizations who place the media," says Martha Montoya, publisher of Seattle, WA based El Mundo newspaper. I am "very disappointed in Walmart's short-sidedness in regards to the Hispanic Market. All indicators prove Hispanic Language Consumers are driving retail sales for Walmart and its peer retailers," says Zulema Tijero, Sales Manager at Washington DC based El Tiempo Latino (owned by The Washington Post).
Anita Grace, president of Anita Grace Ad Execs, and a sales representative for Freedom Communications, Gannett and AIM Texas Hispanic newspapers, says that "over and over newspaper inserts have been proven effective for retailers. I believe Walmart is getting caught up in the 'apps and digital is enough and it’s cheap hype'. I would encourage my Hispanic print peers to develop relationships with their regional marketing manager and make sure they are aware of the cut. When they see a dip in numbers they know what to blame. Also we should encourage the regional managers to report back to corporate and ask for this program to be re-established."
Other Hispanic newspaper publishers point out that it is their experience that their readers want the flyer in hand and that this includes Millennials. In the Hispanic market, there is no digital option to substitute a hand-delivered quality product to the front door that encompasses multiple generations, they claim.
Hispanic: Down in Digital and Mag. Advertising
According to Media Economics Group, overall, Hispanic magazine ad spend in the Department Stores category, which includes Target, Walmart and other big box retailers) is up by about 130% this year. However, so far this year Walmart ad spending in Hispanic magazines is $285,200 down 43% from $500,910 same period last year. This year, Walmart ranks sixth (down from third in the same period last year) among all retailers in ad spending in Hispanic magazines (Macy’s is first with US $2 million in spending).
While, as Delgado points out Walmart may be spending more to reach out to consumers via digital media, its activity "has been virtually non-existent on Hispanic digital properties," says Carlos Pelay, president of Media Economics Group. ."In contrast, during January – May, 2014 Walmart accounted for 25.8% of all ad occurrences in the department store retail category on Hispanic websites – second only to Target (35.6%).
Hispanic Magazines Spending of Retailers (Jan-Jun 2015)
|Wal-Mart Stores, Inc.||$454,690||$285,200||-37.3%|
SOURCE: Media Economics Group