Anyone working for or with Walmart suppliers knows this scenario. An email from Walmart hits your inbox with news about the up-coming modular. After scrolling down a few paragraphs, you realize your items will NOT be included.
How did this happen? You’ve been working with Walmart for years and didn’t see this coming. Were there indications your items were in danger of being removed?
That’s the question we posed to Tiffany Henderson on a recent Conference Call podcast. After working for years at the Walmart and Sam’s Club home offices, Tiffany began work in the supplier community focusing on category management and sales account management.
During our discussion, Tiffany gave us her insight on what suppliers can improve today to keep from being eliminated from the modular tomorrow. Here are the top five things she advises suppliers be aware of to stay on the modular:
1. Constant Modular Out-of-Stocks and OTIF Issues
This should be a given! Tiffany began our discussion by stressing that from Walmart’s viewpoint, “the Walmart customer is number one always. That’s top of mind when a buyer is making an assortment decision.”
No product on the shelf means no sales. With so many suppliers competing for more space on the modular, elimination can be the result of failure to fill the order.
Tiffany recommends monitoring sales daily and fixing the OTIF issues before they get out of control. If you’re unsure of how to improve your supply chain and need to lower OTIF fines, our team can help. Schedule a free consultation now.
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2. Reputation: Trend and Social Media
If an item is no longer relevant, or “on trend,” Walmart may choose to take it off the modular early. It’s important to stay on top of category shifts using syndicated data in conjunction with monitoring the item’s sales.
When talking about the item’s public perception, Tiffany pointed out the influence of social media. If an item is being portrayed negatively online, it can be taken off the modular.
However, the online presence works in favor of the supplier as well. As Tiffany illustrates, your item’s online presentation is gaining more attention from Walmart merchants.
“As Walmart moves toward an omni-channel retailer,” she says, “your online content will become even more important and will likely be considered during the modular relay process going forward.”
3. Duplicative Items in Modular
“If an item is duplicative within the category and there is cannibalization going on, the buyer may choose to remove a specific item,” Tiffany continues.
When this happens, it’s up to the supplier to be proactive in setting their item apart. Tiffany advises her clients to focus on those items when they first start struggling. Bringing innovation to the brand and developing a growth strategy early with the merchant team is key.
4. Misuse of Category Data
Walmart trusts suppliers with inside information and data. Used inappropriately, even with the best intentions, it can be detrimental to the relationship.
“Category data some suppliers have is incredibly important to the relationship between the buying team and the category advisor,” Tiffany explains. “It’s very specific data shared just with the advisorship role and it allows the buyer and the merchant to make the best decisions for the category. That being said, it’s imperative that the data is not being misused.
“Misuse can include sharing it with your internal sales and marketing teams,” she continues. “Often times the category advisor discusses total category innovation and competitive new items with their advisors. Sharing this information would be similar to insider trading in the stock market. It gives one supplier an advantage over the others. Suppliers can lose advisorship. In extreme situations, they can be kicked out of Walmart.”
5. A Poor Working Relationship
It all goes back to relationships! When one of the parties is difficult to work with, the common goal becomes jeopardized.
“Living in Northwest Arkansas, I’ve seen this happen,” Tiffany says. “A bad relationship between the buying team and the supplier has kept an item from becoming successful. It can be cut from the next line review or even removed before the modular season ends. There’s a lot of work involved between both teams to ensure an item is successful (in-store and online).
“Without a strong relationship between the merchant team and supplier, the hiccups and bumps in the road that invariably happen can be that much more difficult to manage when the relationship is already a rocky one.”
(If you have questions about your Walmart business, click here get in touch with one of 8th & Walton’s experts. For more insights on keeping your items on the modular, click here to listen to our entire interview with Tiffany.)
