• by Laurie Sullivan  @lauriesullivan, April 14, 2008

Walmart.com seems to have missed a few turns along the Internet superhighway, and now plans to catch up by tapping its 130 million weekly brick-and-mortar customers by creating places for them to talk about products online.

The retailer recognizes that 75% of Wal-Mart's customers go online, but not all shop at Walmart.com, according to Cathy Halligan, Walmart.com CMO. "Our engagement online is too low, compared with growth rates seen in social network sites," she told Marketing Daily at last week's Forrester Research Marketing Forum 2008 in Los Angeles. "We're growing at two times the industry growth rate, but when you look at what else is growing, such as non-transactional sites, we're not growing as fast we would like."

The push toward "engagement"--an industry buzzword describing everything from media buys to customer interaction with brands--has become the latest marketing craze. The trend gives retailers the means to monitor more closely what consumers say about the brands they sell, so employees can quickly respond. For Walmart.com, it switches success metrics solely from transactions to engagement, as more information about consumer preferences comes through blogs, wikis, social network sites and videos.

Walmart.com has tried its hand at several social network sites and interactive tools. The most successful tool has been Reviews and Ratings, which launched mid-2007. It lets consumers share their knowledge and experience with products sold on the site.

While Halligan declined to detail specific plans on other services that consumers will likely see in the coming months, she admits that executives are looking for new ways to let consumers interact with each other on Walmart.com. "Consider 130 million customers in a community sharing information on products they buy and use," she says. "We learned you need to listen to these customers and implement the top-requested features."

For Wal-Mart, social networks, such as The Hub, haven't proven to be as successful as the Reviews and Ratings. The Hub, an early authentic genuine activity to understand social networks, gave Wal-Mart executives insight into consumer behavior related to social networks. Just 10 weeks after launching its own version of News Corp.'s MySpace in 2006, Wal-Mart shut down the children's social network site, saying it had been experimenting with the medium for the back-to-school season.

Aside from The Hub, Toyland--a holiday Web site that let kids sort through pictures of the season's hottest toys--also caused a stir. Cartoon elves guided kids, helping them compile a wish list they could email to parents. Child consumer protection groups gave the retailer heat for marketing to kids.

From there, Walmart.com launched a page on Facebook for college students to coordinate back-to-school purchases, followed by Soundcheck, a viral music site. It provides exclusive streaming interviews and clips of musicians like Mariah Carey and Sheryl Crow, which consumers can send to friends.

"We are evolving with our customers to enhance our experience online by including more direct levels of engagement," Halligan says. ""We are evolving with our customers. Our customer community is a fortunate asset that we can learn from."