Out of the Box

Wal-Mart’s Image Change

By Menachem Lubinsky on July 11 2008

Believe it or not, Wal-Mart is about to undergo an image change. One marketer referred to their current image as being “dowdy"while another called it “stuffy.” Customers have repeatedly labeled their store signs as “boring.” Even the hyphen in the name will disappear. In recent years, Wal-Mart replaced the hyphen with a star and now it will be referred to as Walmart. The new logo was due to be released by mid-July.

The news of the logo change came at a time when the discount giant was looking to preserve its substantial lead over discount competitors. It was also attempting to project a new user-friendly image. There is also the notion that with a down economy, Wal-Mart hopes to lure more non-traditional buyers to its stores. They are hoping that some customers who frequent department stores might look to Wal-Mart to realize deeper savings.

The idea of a logo change for an icon retailer like Wal-Mart might appear to be out of character. After all, aren’t companies like Wal-Mart supposed to bank on their familiarity and comfort level with consumers? But as much as familiarity is important, marketers say, an occasional fresh look can do wonders for a company. Even Coca Cola and Pepsi Cola occasionally tinker with their well-known branded logos just to make it more contemporary and thus more appealing. They may also develop a new slogan, add colors to their basic label and so forth. They certainly rely on promotions that make them appear to be relevant and interested in the community.

Almost from the moment that a new logo goes into the marketplace for a large company like Wal-Mart, you can be sure that someone at the company is already thinking about the next generation, although companies like Wal-Mart do not change their logos that often. The cost alone of changing a logo can be staggering even for a Wal-Mart. When they do take the plunge, they will factor in the expected benefits, or in the very least calculate how they can stave off losses to their competition as a result of a stale and outdate image.

The truth is that Wal-Mart is probably amongst the most conservative of companies when it comes to changing their image. The current logo has been around for about 30 years, albeit they did tinker with the star and made other adjustments over the years. Wal-Mart’s new starburst logo mimics the cleaner, brighter sign of competitor Target with its iconic red-and-white bull’s-eye. A client recently asked me if there was any specific time-frame in changing or updating logos. I have read the opinions of many professional marketers and I would have to say that the average appears to be 10 years, although it also seems that updates are performed every 5 years. An update can be a color change or introducing a new slogan.

The issue that has always plagued marketers is whether a drastic change in an image can mean the loss of familiarity and a resulting loss of business. I have seen many companies lose market share because the customer simply did not relate to the new branding. I am sure you have seen how hard companies have to work to keep the consumer in the loop when they undergo a name change, mostly because of a merger or acquisition. It has cost Capital One millions to educate the consumers that its acquisition of North Fork Bank meant that customers of the bank were now part of a bigger bank.

In Wal-Mart’s case, nothing has changed. Its 3600 stores are still where they are. The company will probably not make a drastic change in that it will most likely change signage and other images that are associated with the store. For example, the company might take months before it changes the uniforms of its large employment force.

It is extremely important for businesses to constantly refresh their image, including a facelift that involves the logo, a key element of brand recognition. Marketers say that customers respond well to a fresh image and tend to shy away from brands that appear to be dull and stale. Yet, many successful well-known products and institutions have kept their logos for decades without any change. They might argue that the fact they have always looked the same is an important ingredient in their success.

Consumer behavior experts say that customers are not very expressive when it comes to their views of a brand. Said one: “It is one of those subconscious feelings that consumers have. They won’t openly complain if an image is stale but they will compliment a fresh look.” They make the case that this subconscious attitude is directly responsible for an upward or downward curve in sales. Another said that a new logo is like a fresh coat of paint, “You can smell it and see that it’s fresh.”

Every company should periodically evaluate its image. It should look at the image of competitors, because after all every business operates in a competitive environment. They should consult with marketing experts to assure that the image is still relevant. A logo with outdated images can have negative repercussions with consumers. Finally, they should assess their company’s message with some hard questions: “We are selling an A product today whereas 10 years ago we mostly sold B products. Is our image from then suitable for today’s reality of both what we sell and whom we sell to?” If you have doubts about this exercise, rest assured that Wal-Mart already did the research for you.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.