Enterprise Marketing & Promotions Management

Walmart Whoops: Promotion Mistakes that Cost Money and Lose Goodwill

By / December 2014

Insights

Walmart suffered another costly promotion mistake yesterday when it offered $100 gift cards for  $10. A year ago, the company mistakenly promoted 24-inch high-definition Viewsonic® computer monitors, normally costing close to upwards of $200 for just $8.85. Mistakes like these are costly—and too common—not just at Walmart, but at many other retailers.

Outraged Customers

ABC News ran plenty of quotes from “outraged” shoppers in their coverage of Walmart’s error. Some companies honor their promotion mistakes, taking big hits to the bottom line, but the cost in dollars and cents is a fraction of the real loss. The loss of goodwill often dwarfs the cost from the actual mistake.

Omnichannel Magnifies Mistakes

With lightning speed and expansive reach, omnichannel communications magnify promotion errors and the impact they have. The old practice of taping up a sign at the register to let customer’s know there was a pricing error in the circular no longer flies with today’s shoppers. Companies often rack up thousands of dollars of losses before they even realize a mistake is out there. Shoppers are quick to broadcast their displeasure and have the means to do so.

Closing the Gaps in the Promotions Process

Considering the complex and disconnected marketing and promotions management processes many retailers wrestle with, it isn’t a matter of if a mistake is going to happen, but when. Point solutions don’t talk to one another. Departments don’t smoothly interface. Promotion information is passed from step to step, person to person by spreadsheet and sticky note. Processes developed in the old days of the printed circular are not up to the fast-paced, multi-touch reality of omnichannel marketing. Companies need to take a good look at how they are managing promotions today. Trying to reach the connected consumer with a disconnected process is a recipe for disaster, not just for Walmart, but for any retailer.

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