I recently sat down with Jeff Clapper, CEO of 8th & Walton, to discuss Walmart’s increased share of consumer discretionary spending and the opportunities this change creates for suppliers. The transcript is below, or you can listen to our new podcast!
Lainie:
Some information has come out about the revenues at Amazon and Walmart. Walmart, in particular, has seen an increase in discretionary spending. What do you think suppliers can do to capitalize on this shift?
Jeff:
Walmart has always emphasized supply chain discipline and strategic pricing. For suppliers, the key is to proactively bring cost-reduction ideas to the table. There’s ongoing flux around imports and tariffs, so suppliers who can continue to offer competitive cost opportunities will have a real advantage—especially as Walmart gains market share.
One strategy is to offer value-tiered assortments, where the product mix varies across categories and certain lines have better costing for Walmart. Another big opportunity is to be collaborative and strategic in your conversations with Walmart. Be transparent: communicate where you have pricing opportunities, and be honest about areas where you don’t.
Lainie:
Walmart’s e-commerce business is projected to turn profitable this year. Do you see other opportunities in the commerce sector?
Jeff:
Their omnichannel strategy is clearly working. Walmart recently shared that almost two-thirds of their products are made in the United States, which helps deliver consistent pricing in the short term. Their focus on low cost and high convenience is also paying off—they have mini fulfillment centers thanks to their 4,500 US stores, which allows them to fill direct-to-consumer orders very quickly.
For suppliers, it’s important to make sure your online item content is excellent for search and conversion. Leverage Walmart Connect to drive awareness of your products on Walmart.com, and take advantage of the fulfillment options available through Walmart. There are lots of ways to sell, but having a strong online presence is now table stakes for suppliers.
Also, think about substitution-friendly assortments. Treat online as a modular shelf, not a dumping ground. Be mindful of what and how you’re presenting your products on Walmart.com.
Lainie:
Consumers have been shifting some of their purchases toward services and experiences, rather than just things. What can suppliers do in response to this?
Jeff:
It’s a healthy shift in a lot of ways. While consumers are spending more on services, they still need everyday value. Walmart wins by offering trust, convenience, and low prices.
First, suppliers should continue to execute flawlessly—focus on OTIF, SQEP, and low defects. But the next step, and something we’ve seen real success with at the companies we work with, is to deliver a premium feel at a mass price. As price sensitivity and costs increase, suppliers who can do this will see substantial gains.
Again, it’s about being a true partner to Walmart—reducing friction and making their job easier. It sounds obvious, but it’s always worth emphasizing.
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