The Supply Side: Wal-Mart’s e-commerce push echoes through ‘Vendorville’

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.
––––––––––––––––
Walmart.com is not a new kid on the block. The division of Wal-Mart Stores has been around for 16 years, but the retailer’s growing emphasis on online sales has the Northwest Arkansas supplier community taking note of what happens at Walmart.com.

Wal-Mart is serious about e-commerce growth, doling out more than $6 billion in investments since 2013, which includes the recent $3.3 billion acquisition of Jet.com.

Executive recruiting firm Cameron Smith & Associates in Rogers said local supplier teams have gradually added more e-commerce expertise to their sales teams over the past couple of years. Sometimes the new personnel are located in the area but not always. Some suppliers have put e-commerce support staff in San Bruno, Calif., near Walmart.com. They did so because they could not find the right talent locally to add to their Northwest Arkansas Walmart sales teams, Smith said.

The e-commerce talent pool — or lack thereof — in Northwest Arkansas is a problem. Smith said suppliers told his company that until they can find local talent, they will use home office staff and fly them into Bentonville for meetings. Smith said suppliers sometimes fill the positions from talent they developed internally, but it reflects additional resources they’ve invested in their Wal-Mart teams.

Smith and his management group said there’s an opportunity for the University of Arkansas to better prepare retail students for the challenges of e-commerce, as well as brick and mortar. Bill Akins, vice president of business development at Rockfish in Rogers, agreed, saying the region needs to grow its online retail talent pool much the way it did with logistics and supply chain expertise for brick-and-mortar retail.

SUPPLIER CHANGES LIKELY
Akins said Wal-Mart supplier teams trained to focus on brick-and-mortar logistics and supply chain won’t likely meet the evolving challenges of working with the global retailer. He said shopper marketing positions were added a few years ago, but there is room for online and media expertise for the next version of omnichannel retail.

“I have recently sat in [on] line reviews and other supplier meetings at Wal-Mart where the online strategy, and perhaps co-marketing opportunities are also discussed,” Akins said. “That’s if the supplier had their online/media representative in the room. Often they didn’t, because that person is based in their home office. I see that changing somewhat in the future.”

Akins doesn’t think the Wal-Mart supplier teams will add many more personnel, but he said the jobs are likely to change as more of the business is shifted to online.

“Supply chain analyst is an entry-level position in Vendorville,” he said. “It’s about making sure product gets from manufacturer to Walmart Distribution Centers and then out to stores. That position in the future will likely include some expertise on the e-commerce side of the business.”

Akins said suppliers have invested in local teams trained in traditional retail but predicts future retail teams will also have some advertising agency experience and perhaps startup expertise.

“Shopping today is no longer just pre-shop, shop and post shopping behavior,” he explained. “It’s about interacting with the consumer from the initial thought of a purchase through the time they get that purchase home and all points in between. The growth of mobile commerce will grow exponentially over the next four years as the Centennials — ages 10 to 20 — begin to enter the workforce. While Millennials use mobile in addition to other shopping formats, the younger generation will prefer mobile only for many of their purchases.”

Akins said the vendor job of the future will be someone who can tackle seamless commerce because that’s where retail is going.

“We don’t necessarily need a whole bunch of tech workers infiltrating the supplier teams,” he said. “But category managers of the future will have to understand how mobile and online commerce can be blended into their brick and mortar game plan.”

ONLINE REMOVES STORE ADVANTAGES
Akins said digital commerce used to echo what was happening in store and print circulars. Now, the opposite is true.

“What you see in print and on the shelves echoes what is found online,” he said.

Suppliers, Akins said, must become smarter in how they train staff. He said the largest suppliers, like Unilever and Kimberly Clark, have to understand the role they play as digital commerce grows. That is important because the way items are merchandised online is completely different than in store.

“Think about the laundry soap category,” Akins said. “In the store you see a sea of orange [Tide] that dominates the shelves giving that supplier an advantage. Online that’s not what you see. A private label detergent gets the same play as those with the largest market share in stores.”

He said online merchandising is all about content, words, reviews, photos, videos and testimonials which has to be curated by someone. That kind of expertise will be crucial to supplier teams in the future. Akins said a media content position could be handled by third-party service suppliers or agencies, adding those companies can also help fill the gaps in e-commerce merchandising and supply chain expertise.

Smith agreed, adding that Wal-Mart’s Bentonville headquarters is staffed to work with every one of its 10,000 vendors, where San Bruno is not.

“Conceivably, the Walmart Home Office could leverage the strength of the local vendor teams to make sure dotcom is getting its fair share of resources, items, talent and time,” he said. “Many companies we talked to plan to handle e-commerce from their Bentonville office for many years because that’s where the majority of buyers are located.”