3 Reasons Suppliers Should Refocus On Walmart

Feb 9, 2017

Everyone has an opinion on Walmart and most seem to be that “Walmart has lost it’s way”. Walmart has changed a great deal over the past 12 to 18 months and paints a picture of why you, as a manufacturer, should be looking at them as a great strategic customer.

1 — Test and Learn Mentality

When Walmart has performed at it’s best we have seen an organization actively taking chances, looking for ways to change and drive both sales and productivity. 

We seeing now with consumer delivery via partnerships with UBER and Lyft. We see it in the Rogers store with the consumer pickup tower for automating and reducing the friction around instore pickup. The introduction of the speed pass program and quick pivot to the now free 2 day shipping on orders >$35. 

I could go on and on which is sort of the point.

2 — Organizational Transformation to eCommerce

Over the last 18 months Walmart seems to have internalized the reality that ecommerce is the future and that they are not number one in the space. Further, they have been able to find the courage to face that in order to win here they must find a way to self-disrupt and compete in this channel.

Flowing from this we have seen a total shift in strategy and financial alignment. Walmart has restructured their team to aggressively pursue leading in the space, they have realigned financial expectations to allow for investment and lower profitability, they have engaged in significant acquisitions for talent and business models. 

Even with their own site we see them being more aggressive in setting up new suppliers, finding new ways of driving the consumer to their site and investing across the site to ensure it providing more ways to generate revenue and satisfy consumers.

3 — Optimized Bricks and Mortar Business

It appears that the Brick and Mortar business has a clear mandate, deliver strong sales while contributing the financial firepower to enable the transformation to eCommerce. This is coming from finding more ways to deliver value at the store level to shoppers.

We see this expressed as investing in additional and higher paid employees, improving the internal systems (new leadership here), new leadership in place at Sam’s Club and overall simplifying their business model as part of their annual restructure.

Bringing it Home

Walmart is going to continue to increase their share of US retail as we have seen the demonstrate over the past couple of years, meaning they will continue to provide an efficient growth platform for suppliers.

Walmart has the most engagement with shoppers of any retailer, they have now positioned themselves to be able to make the most of this by building an online relationship and potentially convert them to eCommerce shoppers. By refocusing on a culture of innovation and optimization they create the best opportunity to bridge the gulf between the eCommerce and Bricks & Mortar.

Whether or not omnichannel proves to be the winning idea over the long run, who can say, but today it is clearly adding to the value proposition for the consumer. This is providing more ways Walmart can engage with the shopper and drive their eCommerce traffic. 

Most notably it also provides the best channel for you to get your products and innovations in front of the most shoppers. You can be confident in a company who now understands they must have a win/win relationship with you to succeed in their quest. This puts you in the enviable position of being able to market and sell to their shoppers at the same time…don’t dither because like a rollback you never know if this will be permanent or not 🙂

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