For thousands of suppliers, Walmart represents a dedicated business in itself with its own complex set of procedures and challenges. Obviously, the upside potential is tremendous. With nearly 4,700 stores in the U.S., the company's combined selling space is estimated to be roughly 34 square miles. Most suppliers with a long-term Walmart relationship dedicate great resources to the effort. According to the latest Retailing Today Walmart Supplier Survey, over 60 percent employ 40 or more people in Northwest Arkansas to service the account.
Walmart makes efforts to be transparent about the standards it demands of its suppliers (it has a 46-page manual available online), but the nuances of working successfully with the chain's buyers and merchandisers are more elusive. On last weekend's 8th & Walton Saturday Morning Meeting videocast, host Derek Ridenoure interviewed two Walmart senior merchandising directors, Zach Simpson (beverages) and Darrin Robbins (automotive) to gain insights for suppliers. Mr. Ridenoure asked his guests, "What's something you really wish suppliers knew before they ever stepped foot in the office or picked up a phone to called the buyer?"
Much of the advice dished out liberally by Mr. Robbins and Mr. Simpson sounded like Trade Partnerships 101. And in their tone, one could detect an element of frustration. Mr. Robbins, for example, appealed to reps who keep issues to themselves. "If you've got a problem within your business, make it heard — especially if it's something that's material. If you have in-stock problems that are just continually perpetuating, raise your hand. If we don't know about it, we can't fix it."
Another theme the two hammered home was the need for suppliers to consider their value proposition all the way through to the consumer.
Mr. Robbins describes pitches from reps introducing a "new feature" only by explaining its sales potential to the supplier.
"As the buyer you have to sit back and say, OK, that's what it means to you. What does it mean to me?" said Mr. Robbins on the program. "And by transference through me, what does it mean to the customer? Am I just going to put this feature out there and it's going to suck the volume out of these other suppliers? ... I mean, that space is going to be productive. It's not always about how much you sell, it's about how much more we could sell than we could have otherwise."
Another pointer: Walmart isn't necessarily looking for product that does well in 4000+ stores. In fact, consumer centric appeal may win over mass appeal in many local markets.
"There's a saying that in order for us to get bigger we have to act more locally while still maintaining scale," advised Mr. Simpson. "That's a challenge I try to instill in a lot of vendors that come in — the big guys and the little guys — 4000-store features are great and they move the needle for your organization, but I've got to become more relevant and I've got to use more precise tactics."