At Walmart, ’tis the Season of Cross-Holiday Marketing

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This week is prime time to see retailers’ annual mixed holiday marketing in action. Take Walmart, for example: it’s been busy wooing shoppers with Halloween candy, costumes and decorations and laying the groundwork for the post-Thanksgiving Black Holiday and Cyber Monday preparations, while also tending what should be the biggest payday of the year — Christmas and year-end holiday sales.

Having already announced the return of its layaway program back in September, this week it heightened its seasonal appeal in consideration of shoppers stressed by job losses and the gloomy economy, by announcing a Christmas Price Guarantee — because “the greatest gift we can give our customers this holiday is great low prices on the things they want most,” says Walmart’s chief merchandising officer, Duncan MacNaughton.[more]

With the Christmas Price Guarantee, a customer who buys an eligible product (hopefully on the hot toy list) at Walmart anytime between November 1 and December 25 and then finds that same product advertised for less at another store will get a Walmart gift card for the difference through December 25. Items placed on layaway are also eligible for the program.

Walmart is adding the Guarantee as an extra sweetener to get shoppers into their stores or to their e-commerce site. The retailer already has a number of other incentives in place, including a holiday credit offer (no interest if paid in full within six months on every purchase, every day in November and December 2011, with a Walmart Credit Card) and free shipping of most products via Walmart.com’s “Site to Store” shipping, as well as free shipping direct to home on any order over $45.

Brad Tuttle of TIME writes that, from a retail perspective, the idea “succeeds on at least two levels. First, consumers will be more inclined to shop from the get-go at Walmart. … Second, because Walmart gives shoppers the difference in price with gift cards rather than straight up refunds, the new promotion guarantees its stores will benefit from customers being forced into a second round of browsing the aisles for merchandise.” He adds that the gift card is also a smart move because “studies show that, compared to cash, debit or credit cards, shoppers use gift cards more foolishly, without regard to price.”

Doug Hart, partner in the retail and consumer product practice at BDO, USA thinks Walmart may be trying to recover from two years of slumping sales by using its 2008 strategy of aggressive discounting early in the holiday shopping season. He tells Mediapost’s Marketing Daily, “Walmart is trying to give customers assurances that they don’t need to wait to shop later in the season to get better deals — a strategy to move sales forward in the season.” Still, he says, “It’s too early to tell whether this is the start of a price war.”

Price war or not, Walmart needs to be proactive and get a jump on its retail rivals. The company is not only the world’s largest retailer, it has built its reputation on offering consumers the lowest prices. Nowadays, especially during a sagging economy, other retailers are far more willing to cut prices to attract customers to their stores and websites. Walmart is getting squeezed at the low end by cut-rate dollar stores and at the high end by department stores and online shopping sites. With major online retailers offering free shipping and matching store prices, competition is even more intense.

Walmart’s early action will likely be carefully scrutinized by other leading retailers, and if they respond in kind, it could lead to a very favorable shopping environment for consumers this holiday season.

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