• by Mark Walsh  @markfwal, September 14, 2011

Wal-Mart may still be a long way from a large chunk of sales from handheld devices, but that doesn't mean the retail giant is not focusing on mobile as an increasingly crucial part of how its customers' shop. "It's a game-changer for us, but still very much a work in progress," said Greg Warren, vice president for creative at Wal-Mart, speaking Wednesday at the ANA's 2011 Mobile Marketing conference in New York.

Helping to drive the company's mobile strategy is the growing shift from feature phones to smartphones. Warren estimates smartphone penetration among Wal-Mart customers is roughly on par with the U.S. average of almost 40%. And he expects smartphone sales at Wal-Mart to overtake those of regular phones this year.

With more shoppers using their phones to find product information, compare prices, get coupons and special offers and make purchases, the world's biggest store doesn't want to be left behind. Warren predicted that m-commerce will eventually surpass e-commerce because of the ubiquity of devices and the unique role they play as a "continuous channel" for marketing throughout the day.

When it comes to leveraging mobile in retail, he highlighted three key goals that guide Wal-Mart's mobile initiatives: engagement, utility and community.

In terms of engagement, Warren described mobile as the best medium yet for reaching customers as individuals at scale. That's largely because mobile enables new types of personalization based on user shopping habits and purchase behavior and technologies like geolocation.

As an example, he pointed to the company's Sam's Club app, which relies on customers' shopping history and location information to serve them appropriate eValues, or store discounts loaded to the app. "Mobile is the only way we can engage customers at this level," said Warren, who leads Wal-Mart's advertising, design, media and PR efforts.

He also noted that Wal-Mart welcomes shoppers to compare prices, because it believes that usually benefits its own sales rather than sending people to other stores.

Building utility into apps or other mobile products is also critical to giving users control over the shopping experience -- from creating shopping lists to allowing price comparisons to higher-level content, including video and QR codes. One capability that Wal-Mart is exploring is giving customers the ability to map their shopping list to the layout of each of its 4,000 U.S. stores.

He pointed out that during a typical 30-minute shopping trip, a full 16 minutes is spent looking for desired items. By leveraging mobile to help people navigate its vast outlets, Wal-Mart hopes that customers can avoid the frustration of wandering through aisles to find what they're looking for. But that type of feature would not be added to its main shopping app until at least next year.

Much of the company's technology experimentation starts at its @Walmartlabs, its 70-person R&D arm in Silicon Valley.

Warren also emphasized the importance of building community through mobile to generate feedback that can be used to improve mobile offerings. In that vein, he underscored the importance of tracking nitty-gritty user data, such as how long it takes to open an app, look up a store location or complete a search query using an app.

"We initially delivered a less-than-stellar experience," said Warren. "We had to go back and redesign the entire apps so it would work better." Judging by the 2.5-star rating of the Wal-Mart iPhone app in the App Store, there's still room for improvement.

Despite MediaVest's sponsorship of the event, and Warren's own background as president of client services at Starcom MediaVest, one aspect of mobile marketing he did not express much enthusiasm for was display advertising. During a Q&A session, he explained that advertising was not central to the type of utility customers are looking for in mobile.

"It's going to be a little bit tough to convince us that [advertising] is a critical way to use mobile," he said. "It's an old model trying to creep into a new technology." He suggested that in his own experience, he often tries to bypass takeover mobile ads. "How many times do you hit that "skip this" button?" he asked the audience. His message: The interruptive model is not well suited to mobile.