Walmart Pushes 'Free' to Lure Customers Back

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Walmart (WMT) is known for its old slogan of everyday low prices, though its current motto is "Save Money. Live Better." Now, it's moving toward "free" to draw customers into stores, using coupons, promotions and samples. The retail giant is leaning heavily on its website, Walmart.com, to promote the deals. Not a bad plan, given that online research firm ComScore listed Walmart.com as the 29th most visited site in the U.S. in May with 33.6 million unique visitors.

Though it's the world's largest retailer, Walmart needs to juice up its U.S. sales, which have been a glaring weakness in its quarterly results of late. In its most recently reported quarter, U.S. same-store results dropped 1.1% -- the eighth consecutive quarter in which they had fallen. Walmart's revenue growth is now driven mostly by international sales, particularly in China.

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Walmart push into the coupon arena may be a reaction to the soaring popularity of Groupon, though Walmart's current coupon offerings are more prosaic, ranging from eye drops to Heinz 57 Sauce to Nudges Wholesome Dog Treats. Walmart even offers a PC download to help customers to print out the coupons.

Now, those coupons are free, but they don't reduce the prices of the products to zero. However, Walmart is using "free sample" programs to promote some items from the higher end of the product spectrum. One example: L'Oreal Gene Science Skincare. Walmart suggests that shoppers can "Try it before you buy it. Enjoy free samples of the newest brands and latest products." Walmart's elaborate shopper tracking system almost certainly drives which products it offers such samples for.

But Walmart's most wide-ranging "free" drive may involve its in-store events, a clever device to lure customers back to its big-box locations. Promoted via calendars online, the programs are coordinated across large numbers of stores. July's in-store promotions include a Maxwell House Coffee and Honey Nut Cheerios event, a Dannon Oikos Greek Yogurt event, and a Dr Pepper Totinos event. Walmart clearly hopes that people who come to test drive (or is it taste-drive?) the soft drinks and pizza rolls will walk away with a couple boxes of Totinos or a case of Dr Pepper. At the very least, they'll be in the stores, doing some shopping.

U.S. consumers may just benefit from Walmart's woes: The retailer needs foot traffic, and it's willing to give a bit more to get it.


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