Walmart.com continues to restructure its operations under the direction of CEO Marc Lore and the new executive team in an effort to simplify and streamline the buying process.
Wal-Mart Stores spokeswoman Danit Marquardt recently told Talk Business & Politics they will include consolidating the merchandising departments of online and offline sales.
“We recently rolled out a new retail organization to establish teams that will be responsible for all facets of merchandising – including first party and third party. As part of this new organizational structure, the grocery and consumables team will be responsible for all of these aspects of merchandising,” she said.
The buying teams in Bentonville will also be responsible for online orders which is designed to reduce the number of meetings and better align a suppliers business strategy with Walmart U.S. A small buying team will remain in San Bruno to handle suppliers that only sell online.
Suppliers in Bentonville recently told Talk Business & Politics that Walmart.com is also in the midst of limiting marketplace access for grocery and consumables. Marketplace sellers already have a somewhat limited presence on Walmart.com, but if all access is restricted by third-party marketers, suppliers will be able to ensure their margins are protected.
Walmart has not confirmed this change to marketplace access, but three people familiar with the situation said it’s on the table and for good reason. Some suppliers feel their relationship with Walmart is weakened when a third-party marketer is able to sell brands that already do business with Walmart.
“I encourage suppliers that I represent to try and sell directly to Walmart and Walmart.com and avoid marketplace entrance. I have seen third-party marketers try and over price items they have secured on close-out which negatively reflects on the brand,” Dennis said.
Dennis welcomes the changes being made at Walmart.com because she said small suppliers have found it difficult to maneuver the separate portals of Walmart U.S., Walmart.com, Jet.com and Hayneedle.com. She said aligning the buyers should make it easier and simplify the communication chain.
Eric Howerton, CEO of Whytespyder in Fayetteville, said he’s heard rumblings of tweaks being made to marketplace access but had no details to share. He did say it makes sense for Walmart to look at limited marketplace access for food and consumables because the retailer wants to have better control of the quality and service elements.
Howerton said Walmart.com has been focused on growing its online inventory with the expansion of third-party marketplaces, but with that the retailer has had to give up some control. He said Amazon has also begun cracking down on third-party marketers who sell food.
“Food is a category where Wal-Mart Stores dominates Amazon being the larger grocery in the country and one of the largest in the world. Walmart no doubt wants to deal directly with its suppliers in food because that’s the only way it can control the quality,” he added.
Talk Business & Politics surveyed Walmart.com to look for third-party marketers offering food for sale on the site. In the coffee category there were two third-party marketers selling Nestle creamer (flavored), one of those being peppermint and likely a seasonal product in stores. Dunkin’ Donuts Original Blend Coffee was also sold by three separate marketplaces offering various sizes and flavors. Walmart.com was not selling the exact items procured by first-party suppliers.
In the snack category, items such as Grandma’s Chocolate Brownie Cookies were sold in bulk, by Tax Depot, a third-party marketer. This bulk item was not found anywhere else on the site. There were Little Debbie Brownies (12 count) being sold by The Market, and this product received bad review of 1 star, saying the product was stale and dry, and the customer was sorry it was purchased. Little Debbie Brownies are sold by Walmart.com and at Walmart U.S. stores. The lack of control in the third-party marketplace product quality is what Walmart.com is trying to alleviate, according to Howerton.
Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.