Mark Vandegrift
Welcome to another episode of the Brand Shorthand Podcast. I'm your host, Mark Vandegrift, and with me today is our hero of heuristics, Lorraine Kessler. Lorraine, how you doing?

Lorraine Kessler
Oh my god. Oh heuristics. Wait, let me get my dictionary out.

Mark Vandegrift
Well, it ties closer to positioning than you might think. A heuristic is a shortcut to a longer meaning.

Lorraine Kessler
Ah, there we go. Okay, yep.

Mark Vandegrift
Yep. And we always say, let's get that nugget so that we can see the position in the mind, right? Yep. Yep.

Lorraine Kessler
I love that. I love shortcuts.

Mark Vandegrift
So you're our hero of heuristic.

Lorraine Kessler
Yeah, I like that. That's good.

Mark Vandegrift
Good. Well, let's kick off the episode with some new brand news. You know, my favorite healthy soda, Poppi, right? Always got to bring that up every so often. Well, Pepsi, even though they bought Poppi, is now officially in the prebiotic soda making. And you know, Coca-Cola entered with Simply Pop because they were going to buy Poppi, didn't do it ended up coming up with their own. So now Pepsi's in the prebiotic cola space and apparently it's prebiotic cola in the traditional cola aisle. So figure that one. You're going to go to the prebiotic soda one and not see them, but you're going to go to the traditional and see them. So tell me about the shelf space or what I'm supposed to think about this.

Lorraine Kessler
Right. I don't know, the carbonated beverage category is already unbelievably insane, right? It's really a confusing category. And colas are only a small part of that, right? So, I mean, there's so many other carbonated beverages, alcoholic and non-alcoholic, and seltzers and waters, and healthy ones and not healthy ones, and so on and so forth. So, it's just it's mammothly expanding. So it's, you know, it's really hard to slice and dice in your mind what all this is. But I think Coca-Cola at least created a new brand called Simply, right? Which makes sense. Where is Pepsi calling this new cola, this prebiotic, is that what it is, a cola? Are they calling it Pepsi?

Mark Vandegrift
That's what it sounds like.

Lorraine Kessler
You see, that's a mistake right there. I mean, what is a Pepsi now? Is it a prebiotic healthy drink? Is it a traditional cola drink? Is it the great Pepsi I remember when you told me I was the drink of the new generation? Or is it the drink of the health nut? They've totally confused their brand message, in my opinion. By really cheaping out to not creating a new

Mark Vandegrift
Well, you know what it smacks of? It smacks of what they did to Coke, causing Coke to come out with new Coke, which was a dismal failure. Now it feels like the external pressures to Pepsi, you know, dipping as far as they have in terms of where they are with market share, it feels like they're coming out with new Pepsi.

Lorraine Kessler
Well, it's just, I know it's a segment. Here's the problem with segmentation. They get into these segmentation things and they say, well, people want a healthier cola. Great. Let's create a Pepsi that's a healthier cola. The problem is that a brand can only stand for one thing in the mind. so Pepsi doesn't stand for healthier cola. And we could argue diet Pepsi, diet cola, and that all seemed to work out at some point, but you know, I would say this, the cola category in carbonated beverages is the smallest category today. And I believe I'm right about that. And you could look at different reports. It's really hard to sort all this through. Some reports say it's kind of holding its own. It's not the category is growing carbonated beverages is growing like 6 % CAGR. But the cola part isn't. It's kind of stable. But other reports say, no, it's the cola part, which is the caramel flavor, is going this way, as these other carbonated beverages all grab a small piece. So it's what we would call Jack Trout, Paul, you're chasing a market down by fraction. It's like what happened in the beer category, right? And if you read Positioning, he'll talk about Miller Lite and slicing and dicing and chasing a beer category down. And I just feel like what that does, they're creating more confusion, more division within their own brand line, and more opportunity for your friend Poppi and Ollipop. Right? I mean, that's so upside for them, downside for Pepsi.

Mark Vandegrift
Yeah. Yep. Well, I mean, if you bought Poppi, why wouldn't you just push that? Why, why confuse it? I don't get that. So, but you know, going back to what you said about what we've known something for a long time, and this brings us to our topic today and that's Walmart. Okay. If I say Walmart, you say

Lorraine Kessler
Low price, always low price, always. There's the emotion, not just low price, always. Yeah. Yeah.

Mark Vandegrift
Right. Always low price. And guess what? They're trying to change their perception. What in the world? So let's just start this. Let's start off with, you know, share a little bit about the low price position and why we use Walmart as one of our most common examples of low price. And then I'll talk about the transition they're trying to make.

Lorraine Kessler
Well, structurally Walmart changed the way retailers operated. They put distribution very close to where their stores were. They started in D and C markets as kind of the general store, but they had a totally different distribution schema. They had a totally different buyer schema. They literally flipped the script where manufacturers used to be in charge of where their products were sold, and they flipped it where the retailer had all the leverage. So, structurally, they made differences, which meant they brought technology in where they could inventory when something was pulled. They had computerization early that could say exactly what was pulled and count their inventory down to the unit or the SKU. So, these were things that revolutionized retail gave them a structural advantage so they could always be low price combined with their enormous buying power as they grew bigger. So we always say, if you're going to be low price, you have to have a structural advantage and you have to be able to keep that structural advantage. And when you lose that, then you need to kind of adapt if you will. But the other part of their benefit, that was the hard benefit, always low price. The, I think the soft benefit was the convenience of being a general store. The idea that it was always low price for the things you really want or everything you need. I never looked at Walmart and thought it was always low price just for groceries or always low price just for hardware or always low price for Carhartt. We looked at them as America's general store. So there was this idea and I think it's a very strong idea. That Walmart has always carried everything and always made a promise of low price. So

Mark Vandegrift
Okay, so on June 6th, Walmart released a new introduction to Walmart to announce all the new things the company now offers. Here's their list. We now have more than a half a billion items available online and in our app. We now have express delivery to your door in as little as one hour. We now have a Walmart membership that gives you perks beyond groceries. We now have a digital experience that's well better than most people realize. I thought that was a horrible line. So Lorraine, here's what they launched. It's known as Walmart. Who knew? And the idea is to help introduce, back at the beginning of the year. And we discussed this in our season three kickoff episode, their updated brand look and feel, right? Bolder font, bolder fuller, yellow spark, and a refresh color palette. Okay, true blue and spark yellow, they call it. So now they're trying to change the perception of the brand with this Who Knew campaign and highlighting its offerings capabilities that customers didn't know existed. So low price or who knew? What are your thoughts on this strategy to reintroduce Walmart?

Lorraine Kessler
Well, I don't know who's saying that this is a perception change because it's not a perception change. And if it's coming from inside Walmart, then they need their heads examined. Because all they're trying to do is say Walmart has evolved. It has adapted. And it has adapted its idea of being everything you could possibly want, anything your heart desires for less with the convenience you expect. That's really what Walmart's about, right? And so they adapted in ways that they deliver the product, great. They adapted online versus brick and mortar, great. They now have 6.4 % online share compared to Amazon's 37.6%, number two behind Amazon. So the second largest online retailer. So the who knew as a commercial, an ad is fine. I don't consider it a perception change. Now, if they're saying it's a perception change, it's ridiculous. It's a name. Who knew what? Right? It's not a statement of anything. It's saying you define who Walmart is. No. To me, the commercials really, in the old vernacular, in the old days, we used to say, new and improved. Okay? It's not a reinvention of what Walmart always stood for. I would much prefer that they said, whatever you can imagine for less, the new Walmart. I mean, that's really what they're trying to say. It's the new Walmart. And what are the key points that Jack Trout makes about repositioning when you adapt to crisis, the forces of crisis change or competition. Is that you always have to tie back to what people first believe or what they do believe, right? You go back to kind of the beginning the the core knot if you will and the core knot for Walmart is what I just said whatever you can imagine for less and I mean now the line is not everything you need or everything that's most important, but whatever you can dream of because they are selling things that are off the skew that you wouldn't expect. So I just think that's a much better way to state it. Who knew? Like never, it's like a lawyer, right? Don't ask a question unless you know the answer. So I'm not sure what answer they're gonna get for that. I think the problem here is CMOs and the marketing people, insider thinking, they drink the Kool-Aid and they overstep what they're really trying to do. You mentioned the brand refresh, the logo, the color. I think that's all great because it's far more internet, let's say nuanced. It fits the internet age a lot better than they're, and they really didn't change things except they made Walmart seem a little fresher, which goes with my idea, you know, is that new and improved, simple.

Mark Vandegrift
Do you think the tonal change, I guess, I always saw Walmart as very practical, utilitarian advertising, right? And I mean, they showed people how their products are used in a lifestyle sort of way, but the tone of the release, they did a news release and the news release was kind of titled something, which is weird that a news release is titled but it was, you thought you knew us, we're flattered. And then they signed off as your neighborhood go-to Walmart. Yes, that Walmart. I think what I'm sensing is that it's switching tone, maybe what we would call the brand personality. Do you think maybe it's more of that that they're doing than they're getting away from their low price position and they just didn't remember to keep the low price position within that tonal change. Is it a short-term misdirect maybe and a stylistic challenge or what?

Lorraine Kessler
Well, I think here's how I would look at it as a marketing if I worked for Walmart. We need to communicate to people today that Walmart is more than its stores. We have all these things that serve our core customer. And we just need to communicate that. They don't know that they can buy all these other things, that we have these perks, that we have these services, what have that's an advertising communication objective. To mix that with positioning is the problem. It should never, our position is still gonna be this. We're still gonna be low cost, always low price. But now what we offer is broader. So again, I'll go back to my line, everything you can imagine for less, right? You can imagine it, we have it for less. That would have been my tone, not this kind of false deferential, you thought you knew us, you don't know us. Yeah, I do think the tonal shift is, I wouldn't say they need to stay so practical because it's a little bit nuts and boltsy. And that's part of the problem with Walmart versus Meyer. Let's say Meyer, right? You compare the two experiences, Meyer has a little more upscale, better feeling, shopping experience. So they do have kind of a store experiential problem that's spilling over. So I really want to elevate kind of the feeling side, if you will. But I think that tonal direction that you just mentioned is not the one I would have gone to.

Mark Vandegrift
Well, and it brings up another question, which is, you know, when we want to launch websites, clients sometimes go, should we do a news release? Should we make an announcement or anything? I guess I've always been of the opinion that just act like you've been there before. And when people come back and experience you again, like we're not trying to let people know where we created a new website or a new ad or anything here. Walmart does a press release about a new campaign. And it seems to be a popular thing to do these days, maybe just to get people to notice it or comment on it. I'm not sure, but it almost feels like if they hadn't said anything, they wouldn't be getting the critique that they're getting. Right. If you had just put it in to circulation, you see if it impacts store sales. Okay. We move on. If it doesn't work, we try something else. If it does work, then we're doing well. Here, it's weird that they're announcing, we just put out a new campaign and it's got a tonal shift to it. And then it was even described kind of incorrectly as to what they were trying to do with it.

Lorraine Kessler
Right. I think the description, I don't think there's any problem saying we have a new campaign. Now be honest and be real. We have a new campaign to help people understand that Walmart is now bigger than just its brick and mortar stores. That we have all these wonderful services and that we're now an online leader and blah, blah, blah. That's what the campaigns to me objective is it's not to change our position. In fact, I would go back to the vagus nerve and you know, the vagus nerve is the largest nerve in the human body from top to bottom and it affects everything in your health. I would go back to the vagus nerve of their core position. We want people to know that we're always low price now for more than you ever imagined. And in fact, if you can imagine it, we have it lower price. I would have just tied it right back to that Vegas nerve. I would have made this announcement of we have a communication problem in terms of making people aware of our services and how they've changed. That's the true story. I think if they're honest, but the problem is we get these CMOs, we get these people writing this stuff who try to create some sort of pixie dust and throw magic dust where it shouldn't be thrown. And you and I talk about this a lot. So again, if they went back to the Vegas nerve and said, this is the new Walmart, people were like, OK, great. And my other point is, who doesn't know they're leading online behind Amazon? I mean, it's pretty obvious. It's not like it just happened last month or six months. They've been pretty good with their online. So yeah, I don't have a problem with announcing it, but it's small news and it should be put in its proper perspective. And this is about adopting and evolving the brand. It's not about abandoning everything we knew about Walmart. And that's the mistake. They tried to make it seem like, I don't know, maybe there's people who work for Walmart who are self haters. They must think that, we're terrible. We're so old fashioned. Like we're this or that. We need to change that.And I'm sorry for them, if that's what they think.

Mark Vandegrift
Well, we decided we were going to have a Jaguar Award of copy nothing, right? In our last episode. I don't know that we're there giving out this award yet, but what's your prediction for this particular campaign? Are they going to see positive results out of it? Or do you think in six months they're going to abandon it and go back to something else?

Lorraine Kessler
Well, if they don't use the theme line, who knew, as a reposition, or we're trying to dramatically change what you believe to Walmart, and that you just watch the commercial as most people are going to, and they're not going to read all this crap. And that's what it is. It's pure crap. They're going to just sit in their home, they're going to see the commercial. I think they're going to get the message from this commercial that Walmart is, it's new and improved they have a lot more than I didn't realize or I did realize. Well, that's good. And so I think the commercial itself is not a problem. I think it's all the narrative around it that's the problem. Yeah.

Mark Vandegrift
Yeah, right. Good. Well, let's wrap up this episode of the Brand Shorthand podcast. Thanks listeners for joining us and Lorraine as always being our wonderful hero of the heuristic.

Lorraine Kessler
Is this like Rex Huriman? I don't want to spell it that way. Oh my gosh.

Mark Vandegrift
No. So we appreciate those that listen and just ask you to share and like and tell a friend, tell a stranger and subscribe. And until next time, have an amazing day.