The Supply Side: ARROWSigns awaits national Walmart rollout

They say necessity is the mother of invention and that’s certainly the case for ARROWSigns founder Rhonda Pieracci. The southern California entrepreneur has invested more than two years into developing a cardboard sign business with the help of Wal-Mart Stores Inc.

“I was helping a friend with a garage sale back in 2010 and when I left her place around 7:30 p.m. I decided to run by the store and pick up some signage. I went to Wal-Mart looking for temporary directional signage, that was already printed ‘Yard Sale,’ but it didn’t exist,” Pieracci said.

She visited Office Max for the products and the found of the cost of signs she needed would be $54. That revelation sent her back to Wal-Mart where she purchased poster board and markers.

“I spent more than two hours that night on the floor in my living room making the directions signs for the nine turns to her home. All this time I was thinking this is ridiculous, there should be a product on the shelf for times like this, Pieracci said.

BIG IDEA
At the time Pieracci owned two other businesses but said she became infatuated with designing this product.

“I spent hours after work each night on the computer trying to figure out how we could make this product that I envisioned, tearaway directional signs out of sturdy, colorful poster board that could be printed at home with a typical inkjet printer and some that were preprinted for yard sales,” she said.

After a year of research, she came up with a prototype, applied for patent and then found a local manufacturer in Southern California who agreed to make the signs at $2.99 retail price point that would be attractive for discounters like Wal-Mart.

PITCHING WAL-MART
Pieracci heard about Wal-Mart’s Local Supplier Program and its initiatives to empower women-owned businesses and to support U.S. manufacturing. Her idea fit all three.

“I got an appointment with the local Wal-Mart Store manager to pitch my product as part of Wal-Mart’s Local Supplier Program. I took all of the products he had in the store to make signs, my signs and the cost of signs at Office Max and told him my story. He liked the product and told me that I need to get five other local stores managers on board, which I did,” Pieracci said.

Wal-Mart’s Local Supplier Program is just one way small product suppliers like ARROWSigns can tiptoe into retail world. The program works like Pieracci described it. The first pitch is to a local store manager, who will then refer the product up the chain to a district and regional manager. But it is a Wal-Mart buyer who ultimately approves or disapproves the product, according to Wal-Mart’s website.

At any given time Wal-Mart is working with 16,000 to 20,000 suppliers, according to Duncan Mac Naughton, chief merchandising officer at Walmart U.S. That includes around 3,000 with the retailer’s Supplier Diversity Program and another 5,000 through the Local Supplier Program.

Pieracci said she also got the paperwork rolling for the supplier diversity program two years ago because she owns her business.

“I am now a certified member of Women’s Business Enterprise National Council and we hope that at some point we can work with Wal-Mart to expand this U.S. business beyond the two ARROWSigns products,” she said.

But the big excitement for Pieracci now is how well her signs have been selling throughout California and the response she has received from Wal-Mart’s regional managers. She said Wal-Mart is using the directional signs with some of its store remodeling projects, which is the ultimate endorsement.

“We started with 55 stores in Southern California about six months ago and got that increased to 142 stores across the entire state. I have to pinch myself to believe this is really happening. We are awaiting a national rollout at this time,” Pieracci said, adding that she had an early December meeting planned with a Wal-Mart buyer.

SUPPLIER LEARNINGS
“My company would not be where it is today, without the help of Wal-Mart. People can’t believe that I took my idea to Wal-Mart before I had a single sale. But I did, only after I had done the legwork, product prototype, patent, secured U.S. manufacturing and built in margins that Wal-Mart liked,” Pieracci said.

Just like in any business, she said there have been plenty of lessons to learn.

“People think you can just sell your stuff to Wal-Mart and that’s it, but that’s not it. At the end of the day it’s your business and you have to be in those stores making sure the product is properly displayed, restocked and priced correctly,” she said.

It wasn’t long after ARROWSigns got in the first 55 stores, that Pieracci noticed consumers were tearing the perforated boards. The signs are sold in groups of four, but shoppers were tearing off two and putting the others back in the bin.

“We had to stop that, so we quickly figured out a way to put sticky tabs on each side to hold the two sheets of poster board together so shoppers couldn’t rip them apart. We had 55 stores across Southern California with hundreds of signs to fix — it was me, my son and my husband. I didn’t think we would ever get finished,” she said.

That was a flaw in the packaging that no one detected until it was out on the floor.

“We were so thankful to just be in 55 stores then. Wal-Mart understands how difficult it can be for some startup companies to take on more stores and they are cautious about giving you more than you can handle,” Pieracci said.

She said ARROWSigns had to make a substantial inventory investment before the sales  starting coming in, but any new business requires a certain amount of capital outlay.

“Wal-Mart has been a great partner for ARROWSigns, I think back to how far we have come in two years and feel like I have been competing in the Olympics and gotten a place on the podium,” Pieracci said.