Wal-Mart Looks to the Past for Its Future

Sept. 12, 2007 — -- Sometimes it takes going backwards to move forward. That's the new philosophy Wal-Mart is hoping will take them out of what many call a midlife crisis.

Fifty years ago, Wal-Mart founder Sam Walton said the key to keeping a customer happy was keeping prices low. That vision has made Wal-Mart the retail giant it is today -- offering shoppers a little bit of everything, for next to nothing.

One only has to look into various shopping carts to see the plethora of merchandise customers scoop up at Wal-Mart stories, including everything from mops to candy, electronics to vintage knickknacks.

But the last few years have been less than stellar for the company. Sales have lagged and its image has been challenged.

In response, Wal-Mart is rolling out a new tag line, its first in 20 years. The company is changing from "Always Low Prices, Always" to "Save Money, Live Better," a tribute to its late founder's original business model.

The new tag line made its national debut this morning on "Good Morning America," complete with a new ad campaign featuring images of what shoppers can do with the money they save by shopping at Wal-Mart.

Wal-Mart's chief marketing officer, Stephen Quinn, said the campaign represents the company's true voice.

"We don't claim to be anything in this advertising that is beyond what we really are," Quinn said.

The last few years indeed had Wal-Mart shoppers, and Wall Street analysts, wondering just that. Consider last year's upscale clothing line misstep.

Hoping to mirror rival Target's move in that direction, Wal-Mart took out ads in rather unusual markets, such as Vogue magazine. Analysts and even Wal-Mart itself agreed that it was a bad move and likely alienated its core customer.

Retail analyst Dana Telsey, of the Telsey group, said Wal-Mart is the "discounter for all Americans, and when Wal-Mart tried to adjust themselves to go up in their assortment, to go up in their prices and styling, it wasn't who they were."

Customers seemed to pick up on that as well, a trend clearly visible in Wal-Mart's slowing sales growth.

U.S. same store sales in 2006 grew at just 1.9 percent, the slowest rate for Wal-Mart in 10 years. And while August same store sales (sales at stores opened at least one year) had their best gain since March, up 3.1 percent, Target's same store sales grew at an impressive 6.1 percent.