Wal-Mart to Revamp In-Store TV Network

The overhaul is intended to generate higher sales.

Wal-Mart Stores Inc. is overhauling its in-store digital TV network.

This story first appeared in the July 30, 2008 issue of WWD.  Subscribe Today.

The retailer’s existing Wal-Mart Television Network is operated by PRN, a division of the French company Thomson, and generates ad sales revenue estimated at $100 million annually, according to Media Week.

Wal-Mart’s second generation Wal-Mart Smart Network is expected to be a more powerful vehicle with a three-pronged purpose: aiding in decision-making at the point of sale, generating revenue by selling ads on the network and forging closer relationships with key suppliers such as Procter & Gamble.

Smart Network’s innovations are said to include installing TV screens closer to eye level and building screens into endcaps, fixtures and shelving. With the existing network, flat screens are hung all over the store and, in many cases, in locations that are difficult for customers to see.

The audio also needs work so the soundtracks of the new network please shoppers and employees.

Mike Hiatt, director of internal media networks at Wal-Mart, said a new in-store media network was rolled out to be tested at 40 Wal-Mart stores in the U.S. Industry analysts expect the Smart Network to be unveiled during presentations to marketers and advertising and media agencies on Sept. 4 in New York and at Wal-Mart headquarters in Bentonville, Ark.

“Wal-Mart is constantly testing new ways to deliver a better shopping experience for our customers,” a spokeswoman said. “We’re listening to customer feedback and looking for smart ways to meet their needs and exceed their expectations. We have no details [about Smart Network] to share at this time, but stay tuned.”

With advertising in newspapers declining and digital recorders and TiVo allowing viewers to bypass commercials when they watch their favorite TV shows, marketers are looking for new ways to reach an audience that’s no longer captive. Advertising dollars are shifting to digital screens in elevators and to the Internet. Wal-Mart Smart Network can help consumers pull the purchasing trigger and earn advertising revenue. The retailer can reach consumers where they’re primed to buy. Wal-Mart estimates that 130 million people visit the chain every week.

Wal-Mart introduced its first in-store media network to advertisers and marketers at a summit in October 2006 in Bentonville. Signaling the retailer’s commitment to in-store media, John Fleming, Wal-Mart’s chief merchandising officer, said at the event, “The store is our number one media channel. The network of the future will allow us to take full advantage of it.”