Aug 17, 2006 6:06 AM, PROMO Xtra, By Betsy Spethmann

Wal-Mart Stores named Saatchi & Saatchi X as its first AOR for shopper and in-store communications.

Saatchi & Saatchi X helped design Wal-Mart's upscale prototype in Plano, TX.

Wal-Mart continues the bigger $570 million review for its advertising creative and media-buying. Contenders reportedly include sister ad shop Saatchi & Saatchi, New York, as well as incumbent GSD&M, Austin; Draft FCB Group, Chicago; The Martin Agency, Richmond, VA; and Ogilvy & Mather, New York. A decision is expected by November.

Springdale, AR-based Saatchi will handle communications with Wal-Mart’s 1.3 million store staffers as well as shopper and in-store marketing.

Saatchi has handled promo and design projects for Wal-Mart for seven years. There was no review; the AOR contract simply formalizes on-ongoing project work. It lets Saatchi “scale resources more predictably, and have more efficient staffing. That saves Wal-Mart money over the long run,” said Saatchi CEO Andy Murray.

The agency’s latest work includes the launch of Wal-Mart’s upscale supercenter in Plano, TX.

That prototype, dubbed “Project Blue,” is a laboratory for new products, merchandising and in-store marketing tactics, especially targeting upscale women. “When an innovation resonates with our customers, we will consider introducing it in other stores,” said Wal-Mart executive VP-CMO John Fleming when the store opened in March. The store features a leisurely, rolling layout; signage that distinguishes the store’s eight departments (home, apparel, health, beauty, food, do-it-yourself, electronics, and baby); a huge range of 2,000 premium items, including 1,200 wines and 500 organic products; a fresh sushi bar; a wi-fi enabled coffee shop; quieter cash registers; no in-store radio; and limited Wal-Mart TV monitors.

Saatchi handled research, space planning, shelf sets and signage as part of the store’s design.

“Our work is designed to present Wal-Mart as an easier, more enjoyable, intuitive, and valuable experience. It’s about connecting and communicating at all the points a shopper interacts with Wal-Mart,” Murray said.

Saatchi’s in-store innovation work led to its AOR win. “By bringing the agency into an AOR arrangement as a roster agency we believe we can achieve even greater results,” said Julie Roehm, Wal-Mart’s senior VP-marketing communications, in a statement.

The staff communications work becomes increasingly important as Wal-Mart fights a federal class-action gender-discrimination lawsuit and faces off against state and local legislators over wages and benefits for store staffers. That internal audience is diverse: fully 235,000 are over 55 years old; 225,000 are African-American; 150,000 are Hispanic; and a whopping 815,000 are women.

“From an Associate’s perspective, it means having more input, more ideas, and more engagement in creating the best customer experience,” Murray said. Store-staff communication, now under development, “is a natural extension of communicating intuitively with shoppers,” a new approach that Roehm has adopted.

The contract does not include CPGs’ in-store campaigns for Wal-Mart; those continue to be handled by marketers’ own agencies. Saatchi does, however, handle a great deal of in-store work for clients including Procter & Gamble, Novartis, Frito-Lay, General Mills and Disney.

Publicis Groupe’s Saatchi & Saatchi X ranked No. 48 in the 2005 PROMO 100 with estimated 2004 net revenues of $18.8 million, up an estimated 80% from 2002. The agency didn’t enter the 2006 PROMO 100.

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