The last hundred yards, for the Walmart supplier, is getting from the loading dock to the shelf. It can be a frustrating part of the equation, since it’s not under the control of the supplier — but can be a make or break point for sales.
You’ve gone through the exhilaration and stress of selling to Walmart, coped with the logistics battles to get your product to the store… and it’s not on the shelf when shoppers come to buy?
At the 8th & Walton Saturday Morning Meeting this week, the product’s final push was a primary topic.
“When it hits the store, it goes through a cloud of complexity,” said John Murphy, former VP of Operations for Walmart.
Some of the issues that make up this complexity:
- “One of the best replenishment systems in the world,” says Murphy, pointing out that Walmart uses a complex algorithm to make many decisions along the supply chain.
- Increased automation has its costs, however, as more decisions are made automatically rather than being left to human judgement. This includes not only replenishment, but also staffing and scheduling.
- “Opening price point players… a dollar over minimum wage, and their mind is not on their job.” This was John Murphy again, referring to the fact that the people ultimately responsible for getting the goods onto the shelf are often focused on the difficulties of their lives, not on the best outcome for the supplier.
Murphy quoted Sam Walton saying, “Forget all the gimmicks — get it on the shelf.”
8th & Walton’s Robert Meyer suggested that third party retail coverage could help. “It’s something that Walmart had in the past shied away from, but a lot of suppliers are seeing the benefits.”
Host Derek Ridenoure pointed out that Tom Coughlin had said in a previous Saturday Morning Meeting that third party services would be likely to increase costs and get in the way of achieving EDLP. Still, out of stocks continue to cause frustration for suppliers and for consumers. Harvest Group reported on research they’d conducted which found that only a minority of customers who find a product out of stock in one store will go to another store to buy the product. Most will either choose a rival product or do without — meaning lost sales.
What’s the solution?
- “Make sure you’re executing, and hitting those must arrive by dates,” said Meyer, reiterating what many leaders in the Walmart supplier community have said. Suppliers who use best practices and keep up with their part of the process will have fewer problems.
- Watch out for phantom inventory — items that are showing in Retail Link as present in the warehouse but which don’t get onto the shelf. If it appears that there are inaccuracies which might be affecting you, consider bringing in third party support, at least in the most important stores.
- Use Retail Link data to identify the most important stores. While it might be cost-prohibitive to cover every store, focusing on those that make the most difference can pay off.
Clearly, mastery of Retail link is key. Let 8th & Walton help you achieve that mastery.
