Retailers use many low-price tactics to entice customers to purchase. Sales, one-time offers, limited buys, BOGO (buy one get one), clearance markdowns, and “two fors” (two items for one price) are just a few of the more popular techniques.
One low-price tactic specific to Walmart stores is the Rollback. Though it has a lot in common with other low-price marketing, it is different from a common sale.
What Is a Walmart Rollback?
A Rollback is a temporary price reduction on an item in a Walmart store. A Rollback normally lasts up to 90 days before it is returned to its original price, usually noted on “Was/Now” signing.
Why Does Walmart Use Rollbacks?
Walmart’s pricing philosophy is Everyday Low Price. What that means is they want their customers to trust Walmart to always have the best price on the goods they need. Walmart never wants a customer to think they need a sale, coupon, special offer, or gimmick to get a low price on the items they find in the store or online.
Walmart does not view a Rollback as a sale. It is simply a temporary price reduction on a specific item. Walmart Rollbacks are a way of giving customers even more on top of their already low prices.
Walmart Rollback vs. Sale
Since they are just reducing the price, isn’t a Rollback just basically a Walmart sale? Not exactly. Price reduction is one of the few things Rollbacks and traditional sales have in common. There are more factors that distinguish them from each other:
No Marketing Theme
Traditional sales are marketed with a theme (Labor Day Sale, 50% off sale, Back-to-School sale, etc.). It’s an additional way to build excitement to get customers in the door.
Walmart may put items on Rollback relevant to an event, but you will not see them advertised as Halloween Rollbacks or Mother’s Day Rollbacks. Rollbacks are their own promotion.
Percentage vs. Price
The majority of retail sales offers are percentage-based. It may be a 10% off sale, buy one get another for 50% off or save 30% on a category.
Rollbacks are advertised at a price point, not a percentage. The previous and current prices are highlighted with Was/Now signing.
When a retailer announces a sale, it is normally on a group of items (store-wide sale, sale on apparel items, seasonal item markdown sale, etc.). Even if the sale is on one item (for example tires or candles), multiple brands carrying those items might fall under the sale.
A Walmart Rollback is for a specific item. One bag of potato chips may normally be $4.00 but currently on Rollback to $3.50. A competing bag of chips on the same shelf may normally have a price of $4.25 but be on Rollback at $3.65. Each Rollback offer is unique to the individual item.
Clearance Sale Difference
Marking an item down for the purpose of selling it at Clearance is also different from a Rollback. Walmart does have clearance items. These are usually items the company will no longer carry, overstocks, or items past their seasonal relevance.
Items on Rollback are permanent store items. They will be restocked when sold through. While clearance items can sometimes not be returned, Rollback items can be returned as they are staple store items. Also, Rollback items will return to their normal price at the end of the Rollback period; clearance items may be marked down lower to promote sell-through.
All that being said, a Rollback item can become a clearance item. When Walmart sets a Rollback price on an item, the company expects the item sales to increase. If the item fails to sell, Walmart may determine it has no place on the shelf. The company will then lower the price again and add it to clearance.
Does Walmart Rollback Online Items?
Rollback items are not exclusive to Walmart’s brick-and-mortar stores. Customers can find items on Walmart.com set at a Rollback price. The items are flagged as Rollback and also include the current and previous prices.
Can Any Item Be Placed on Rollback?
Items qualified for Rollback pricing must have a history of being sold in Walmart. In other words, an item new to Walmart can not be debuted on Rollback.
Rollbacks feature the Was/Now price-point signing to highlight the value of the offer. New items have no “Was” price, so they must wait to qualify for Rollback consideration.
Implications for Walmart Suppliers
Before working with a Walmart buyer to place an item on Rollback, suppliers should be prepared to analyze sales during the Rollback period. What happens can dictate actions taken by Walmart or the supplier once the Rollback period ends:
1. No Action Taken
With most Rollbacks, items are returned to their normal price. No significant action on the price going forward or the item itself.
2. Permanent Price Change
Rollbacks are placed on items to drive sales and expand the customer base. If an item is underperforming, a Rollback can give it the boost it needs.
While Rollbacks are temporary, the permanent price of the item can change after the Rollback has ended. If the supplier sees sales drop significantly after returning to the normal price, it may be time to reevaluate the price. Rollbacks can show what customers are willing to pay for an item.
3. Elimination From Modular
Just as Rollbacks can help sell items, they can also determine what items do not belong on the Walmart modular.
If an item is not selling, buyers may agree to put it on Rollback. If sales are still poor while on Rollback, the item may be marked down again to Clearance pricing, sold through, and eliminated.
Walmart strives to be the low price leader for consumers. The company wants their shoppers to expect the best prices at Walmart without coupons, sales, or marketing gimmicks.
By using the Rollback strategy, Walmart shows a temporary price reduction to move more product and to get new customers to try it for the first time at a lower price.
Want to know more about Walmart strategies? Interested in approaching your Walmart buyer about a Rollback opportunity for your items? Contact the experts at 8th & Walton for a free 15-minute consultation.