Evan Schuman's StorefrontBacktalk

Retail chains have been using Facebook and other social media to deal with customers for years, but now someone is trying to use it to acquire new suppliers—and, astonishingly, it’s Wal-Mart. On Wednesday (Jan. 18), the retail giant launched a contest to let would-be suppliers pitch their products with YouTube videos, which customers can vote on to choose their favorite products. The winners get a chance to have Wal-Mart sell their wares online or in-store.

But what’s really clever is how the contest uses social media as stealth customer engagement—an area where Wal-Mart hasn’t been exactly brilliant in the past.

Wal-Mart is calling its “Get on the Shelf” contest an American Idol-like competition, but it’s decidedly less glossy than that. The product videos already online (Wal-Mart wisely rounded up several dozen early entrants to seed the contest) trend heavily toward gadgets and food items, with video quality ranging from late-night TV commercials to strictly homemade. Wal-Mart didn’t even use its own Vudu video service to host the videos—they’re all on YouTube, which isn’t officially connected to the contest. As a result, it really does have a grungy, social-media feel.

Wal-Mart says the three items that get the most votes by April 24 could become products on walmart.com, with the top vote-getter having a shot at being in stores, along with support for marketing and ramping up production. (The “could” is because real or virtual shelf space depends on cutting a deal with the retailer and becoming an approved vendor; according to fine print in the contest rules, if there’s no deal then Wal-Mart can buy its way out of the prize by paying $12,500 to the big winner or $10,000 to either runner-up.)

It’s an interesting stunt for finding new suppliers. And with Wal-Mart perpetually accused of driving small retailers out of business, it’s a nice PR move to show that Wal-Mart is friendly to at least some small U.S. businesses.

But the really clever move here is in customer engagement. Even customers who really like Wal-Mart aren’t likely to believe Bentonville wants to hear from them about what should go in the stores. Letting them vote on new Wal-Mart products? Very sharp (and relatively cheap) use of social to build customer loyalty. Doing that while pretending all along that this is not about customers? Nice stealthy touch.