Wal-Mart: Striving to stay ahead with suppliers’ help

by The City Wire staff (info@thecitywire.com) 19 views 

The standard and rate of success is a continuously moving target, according to Matt Kistler, senior vice president of dry grocery for Wal-Mart Stores Inc.

Kistler addressed several hundred business professionals from the local supplier community Tuesday morning (March. 26) at the Bentonville-Bella Vista Chamber’s monthly WalStreet Breakfast event in Rogers.

In the midst of March Madness, the sports analogies were plentiful to start the early morning meeting.

Jesse Owen won the 100 meter gold medal in 1936 Olympics with a time of 10.3. Kistler said the Olympic record set by Usain Bolt in 2012 is 9.63, a reminder of how important it is for anyone in the lead to continue striving for ongoing improvements in a world where records are continually broken and reset.

From the tone of the Kistler’s speech, Wal-Mart will continue to lean upon its suppliers this year in an effort to keep prices low, reduce overhead costs and better serve the 200 million shoppers who frequent Walmart stores each week.

He said that while the economy is showing small signs of improvement, consumers and Wal-Mart’s core customer is in constant pursuit for low prices in each of the retailer’s shopping channels, from supercenter to e-commerce.

 Kistler told suppliers that Wal-Mart would continue to focus on sourcing products locally and asked for their help saying it was the sustainable thing to do.

Suppliers wanted to know what Wal-Mart’s renewed focus on smaller format stores would mean for their buyer relationships given they are dedicated to supercenter business.

Kistler said there is a dedicated team of buyers for the small format stores at this time as they are being run in a similar fashion to those isolated stores in Hawaii, Alaska and Puerto Rico.

 He said it is Wal-Mart’s hope that buyers will eventually be trained and equipped to handle business in supercenter and smaller formats in a seamless fashion, but for now the two formats are handled by separate buyer teams.

One of the more interesting topics, according to suppliers, was a brief mention of the new smartphone application unveiled at the "Supplier Summit" during the company’s Year Beginning Meeting in Orlando two weeks ago.

Developed locally by Rockfish, the app is designed to improve in-stock levels within a store and increase the efficiency of retail workers. 

The Supplier Portal Allowing Retail Coverage -– SPARC – has been piloted in 28 stores in four markets since last fall. Several major suppliers including L’Oreal, Procter & Gambler, General Mills, Kellogg, Unilever and ConAgra took part in the test markets.

Wal-Mart has been taken to task by several media outlets in recent weeks that store shelves were not being properly re-stocked, which has reportedly frustrated shoppers and suppliers alike.

 The recent unveiling of SPARC hopes to quiet some of the reported discontent and delivers on a promise made to suppliers a year ago, according to one local supplier consultant.

 Wal-Mart says the goal behind the app’s development is to allow real-time data sharing for suppliers and fosters improvement to the in-store climate.

“We partner with our suppliers on a regular basis and remain committed to working collaboratively with them. SPARC, will make sharing data and insights more efficient and give suppliers additional insight into inventory to help ensure their products are on the shelves for our customers,” said Wal-Mart spokeswoman Ashley Hardie.

“Suppliers often visit our stores to check on their products. Allowing them access to on-the-spot information through the app on their smartphone increases efficiency and allows for real-time decisions – and in retail, speed is important,” Hardie added.

The app enhances a supplier’s ability to see products and inventory held in storage rooms and get that product to the shelf as needed by in-stock levels. 

Kistler said suppliers will have to be trained on how to use the merchandising tool, but data can then be accessed from a smartphone instead of bulkier handheld device now required.

“We will be rolling out the program nationally this summer. Supplier representatives participating in the program will complete basic training of the technology used in our stores so they can efficiently complete tasks such as printing missing shelf labels for their items, stocking their products and ensuring their displays are correct. Training will be provided by a third-party merchandising firm,” Hardie said.

"As a Walmart supplier, Kellogg is focused on providing our customers and consumers with the foods they want each and every day.  This mobile application helps our teams ensure on-shelf availability by providing real-time, store-specific inventory data," said Michael Clark, Kellogg Company Director Retail Strategy & Execution.

Hardie said Wal-Mart’s in-stock levels are up significantly in the last few years, and the retailer is focused on ensuring it has the right products on store shelves when customer choose to shop.

Kistler also encouraged suppliers to tap into the plethora of data marketing sources available from Neilsen, NPD and SymphonyIRI.

“We backed away from this data several years ago, but since we resumed subscription again this past year we have gained deeper consumer insights and believe it gives us a competitive advantage in several areas such as driving sales, delivering broader assortments and improved space optimization,” Kistler said.

He said Wal-Mart will hold about 300 special joint business planning meetings this year with various suppliers in hopes of gaining more innovation such as a product packaging redesign and space optimization.

He revealed an overhead slide of butter products stacked in a typical refrigerated dairy section within a store. And then showed a modified slide that included redesigned butter containers that allowed for tighter space configuration.

He said the new design, aside from having more products in the same amount of space, also was more efficient to cool given there was not as much cold air escaping through the wide spaces between products.

“This new design was more sustainable and required less power to keep the product the cool. This is the kind of innovation we are after,” Kistler said.