Visa vs. Walmart: 'battle' of titans playing out in Thunder Bay
Northern Ontario city a testing ground for how dispute might play out in other markets, says expert
A battle of corporate titans is playing out in Thunder Bay, Ont., and a business expert says both Visa and Walmart are using the city as a testing ground for their respective strategies.
"They're going to war," said Steve Tissenbaum, an adjunct professor at the Ted Rogers School of Management at Toronto's Ryerson University.
And Visa is "taking on Walmart where Walmart has decided to start the battle, and that's in Thunder Bay."
In recent weeks, Visa has plastered the northern Ontario city with billboards reminding customers that thousands of local stores accept its card. Drive down a main street and you might encounter two or three of the ads in the span of just a few blocks.
In July, the company also offered several incentives to customers who made purchases using their Visa cards.
The campaign comes after Walmart Canada banned the use of Visa cards at its stores in Thunder Bay, with the intention of rolling out the same policy in other stores across the country.
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Thunder Bay a 'canary' in the coal mine
Visa's campaign is an "attack" on Walmart, said Tissenbaum, but it also conveys another message: It reminds loyal customers to stick with Visa and sends a message of support to other retailers that accept the card, he said.
With the billboard ads, and other incentives in Thunder Bay, "Visa is test marketing what might be the most effective way to fight Walmart."
Thunder Bay is a "canary [in] the mine," said Bahram Dadgostar, Dean of the Faculty of Business Administration at Lakehead University in Thunder Bay, as both companies vie for customer loyalty after a public battle over card fees.
"Since both kind of tarnished their ... reputation in order to fight in front of the customer," said Dadgostar, "they are worried that they may actually lose the loyalty of customers." Visa will not "shy away from spending a good amount of money" to keep them.
It's a battle in which "there is no winner," he said.
Grocery battle on the way?
While the immediate fight may be for customer loyalty, Tissenbaum said it's possible something else is going on.
One of Visa's incentives for customers in Thunder Bay involves a gift card for cardholders who spend a certain amount of money at grocery stores.
That tactic could be connected to Walmart's goal of beefing up its share of the grocery market in Canada, Tissenbaum theorized.
"Walmart is in the process of planning to enter Canada with its grocery stores ... to directly compete with Loblaws, Sobeys and Metro," he said.
"There's no question in my mind this is directly targeting Walmart to say 'We know where you're heading with your strategic plan, we know what you have in mind for Canada, and be ready — we're going to fight you on this.'"
As to whether the two companies might still strike a deal over fees, anything is possible, said Tissenbaum.
"But I think that train has left the station."