A press release issued by Wal-Mart on September 17th. regarding the aftermath of Hurrican Ivan may have the effect of bringing more shoppers to their stores for an ostensibly charitable purpose. Wal-Mart told the media that people wanting to donate money to the American Red Cross to help Hurricane Ivan victims can do so free-of-charge by going to Wal-Mart and using their MoneyGram services, part of Wal-Mart’s Financial Services. Not only would this service “ensure donations will be immediately available for Red Cross relief efforts”, but it also happens to bring more people inside Wal-Mart. Although Wal-Mart said its motivation was to “ensure people receive assistance as quickly as possible,” to use the MoneyGram service, consumers were instructed to “visit your local Wal-Mart store during regular business hours.” Wal-Mart also announced that it was reducing its fee by 50% to wire funds from the United States to the Cayman Islands, Grenada and Jamaica, because of the recent hurricanes. In the same press release, Wal-Mart noted that “Last year, Wal-Mart Stores, Inc. contributed more than $150 million to support communities and local non-profit organizations. Customers and associates raised an additional $70 million at stores and clubs.”
These kind of “philanthropic promotions” are important marketing tools that big retailers can use to attract more customers to their aisles, essentially capitalizing on the misfortunes caused by calamities such as hurricanes, to offer a “special deal” on services that generate more traffic through the store. The Hurricanes also have been good news for home improvement retailers like Home Depot and Lowe’s, not only increasing sales, but giving the retailers more media visibility, with hundreds of news reports mentioning the press of customers going to home improvement stores. The Wal-Mart MoneyGram services, and the colocation of banks inside Wal-Mart are just one more in-store service designed to get the customer through the door, relying on the fact that many of those MoneyGram customers are going to do some impulse buying while they are in the store. This Hurrican Ivan promotion is similar to the Wal-Mart pitch in the summer of 2001 to allow consumers to cash at no charge their “George Bush tax cut” checks. Wal-Mart later reported that consumers spent a major portion of their check at Wal-Mart. Wal-Mart released a statement at the time saying “We’re providing this (check cashing) service for the convenience of our customer.” Hurricanes, tax cuts — Wal-Mart is prepared to get customers into the store by “waiving” the normal fees associated with their services. It may look like philanthropy and good corporate citizenship to some, but to others its just another cynical marketing ploy. To see the earlier story about check cashing, search Newsflash by “income tax.”
