retail

Walmart Re-Embraces The Complexity Of The Smiley Face

Walmart is resurrecting the sunny-yellow smiley face in its marketing, saying it hopes it will add spark to its “Everyday Low Prices” positioning. But that simple smile masks an increasingly complex set of omni-channel challenges facing the world’s largest retailer.

First things first: While Walmart began using the smiley face back in the 1990s, don’t let the behemoth from Bentonville fool you into thinking it owns the happy fella. Smiley has a 50-plus-year history all its own. (And sorry, Forrest Gump fans: It really didn’t happen this way.) It was invented by a Massachusetts ad guy back in 1963, in an effort to cheer up demoralized employees of a company that has come to be known as Allstate. It took him 10 minutes, and he earned $45, according to Smithsonian. 

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Smiley is trademarked by The Smiley Co., and while the company plugs it as the world’s first emoticon, it points out that smiley faces have been found as far back as 2500 BC. (That company and Walmart settled a long legal battle over ownership back in 2011.)

But Walmart says it’s the right time for the image to make a comeback. In an announcement on its corporate blog, Tony Rogers, Walmart’s CMO, says that after pondering ways to reinforce its low-price message, “we felt like it was time to bring back an old friend, and one of the most-recognized symbols of low prices … Smiley.” But rather than simply signifying price rollbacks in stores, as it once did, it will now be used to represent regular low prices.

He says 70% of the retailer’s customers still associate Smiley with better deals. So new ads show the graphic popping in with a great price. “When Smiley is on the screen, our customers know that he is helping them get great prices,” he says. (The image is also being integrated into the company’s “Happy to Help” program for associates.)

The company may be resurrecting an image from the past, but it’s struggling with the future, and is increasingly bedeviled by Amazon.

Wal-Mart’s recently released quarterly results were stronger than expected, observers say, and they acknowledge that it is better-positioned than most retailers to succeed in an omni-channel world. But “moving a ship the size of Wal-Mart takes time, and we caution against extrapolating one quarter (positive or negative) into the indefinite future,” writes Ken Perkins, an analyst who follows the company for Morningstar. Besides pressure from wage increases and lowering its prices, its “e-commerce sales grew just 7% (U.S. growth was higher but not disclosed), clearly below rates posted by larger rival Amazon and smaller competitor Target,” he says. And it’s still unclear whether online investments can actually drive online sales growth.

And while it’s still too soon to say how well ShippingPass -- Walmart’s fledgling $50 attempt to stick it to Amazon Prime -- is faring, Perkins says it can’t hurt. “We don't see ShippingPass denting Amazon Prime's growth trajectory, but we do think it can help Wal-Mart stem customer losses. While many retailers will lose share to Amazon in the coming years, we do think that more than one firm can succeed in the future.”

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