The Supply Side: Suppliers hear details on Walmart.com restructuring

Walmart.com recently restructured under new CEO Marc Lore, which was soon followed by the acquisitions of online specialty retailers ShoeBuy and Moosejaw.

Lore decided make the best use of the newly expanded talent pool and streamlined the organization giving online buyers full control of all the various online channels which includes first party, marketplace and direct shipments by suppliers.

He also said the mass audience sites of Walmart.com and Jet.com will continue to look for ways to share merchandise when possible and though operating independently, the backend inventory will be aligned. Lore also said he wants Moosejaw, Hayneedle and ShoeBuy merchants to oversee and manage those specialty categories of outdoor, home and footwear. All of the changes, while applauded by Wall Street analysts, have raised questions by suppliers about how it will impact relationships and opportunities to grow sales.

Jane Ewing, senior vice president of digital acceleration at Walmart U.S., recently spoke to suppliers about the changes at the retailer’s Supplier Growth Forum in Bentonville. (Talk Business & Politics received a transcript from the event which is the basis for this report.) Ewing said the top questions from suppliers about these changes dealt with how they will best work with store buyers and online merchants in the future, given that Walmart U.S. wants all items sold in stores to also be offered online, with the exception of items that require special handling over hazard concerns.

BUSINESS REALIGNMENT
Ewing reiterated to suppliers that buyers for store merchandise will also handle online business. She said these buyers will choose and buy items for stores and for online, but it will be the online buyers who focus on the customer end of the business by managing and monitoring the first party and third-party marketplace inventory as it’s ordered by customers. She said the online merchants are located in New England, New Jersey, California and elsewhere. Ewing said it’s the online merchants who will determine the fulfillment options best suited for customer’s needs.

Walmart U.S. continues to bring in deeper category expertise in the areas of home merchandise. Suppliers were told that Hayneedle CEO Jon Barker will oversee Matt Baer, general manager for the home category which includes furniture, appliances and storage as well as major appliance for Walmart U.S. in-store and online. Rebecca Gray is general manager for the large home category and is reporting to Barker. Gray is responsible for lawn garden, bed and bath, home decor and as well as kitchen and dining, again for the retailer’s multi-channel approach. Shelley Huff is the vice president of private and proprietary brands as well as general merchandise, and is also reporting to Barker. Her duties also involve in-store and online.

In the entertainment category, Lore set up a multi-channel team with Darren MacDonald in the lead role of group general manager for Walmart Entertainment in the U.S. and e-Commerce divisions. MacDonald oversees five executives in various item specialties. Terrance Oliver is the general manager for electronics overseeing products online and in stores. Mario Pacini is in a similar role overseeing video games, books and other media for the retailer’s various shopping channels. Shrenik Shah is the general manager of music, arts and crafts for instore and online. Also reporting to MacDonald is Carrie Huie as general manager for photo and print and Chris Sponiar, general manager for toys, games, hobbies and seasonal items instore and online.

It’s expected Lore will realign the outdoor and footwear management in the coming weeks with the acquisitions of ShoeBuy and Moosejaw. Those likely changes were not shared with suppliers in the recent meeting. Lore did tell the media during a Feb. 21 earnings call the retailer would work to line up the best category talent in the areas of footwear, outdoors and adventure gear and any other speciality retailer Wal-Mart should acquire. When asked what categories were appealing, Lore said there were plenty of areas of opportunity and the retailer is actively looking. Analysts polled on the topic by the Northwest Arkansas Business Journal like the areas of baby, apparel, pet and perhaps hardware as good fits for the retail giant to consider.

CONTENT PUSH
Ewing told suppliers Walmart U.S. is working diligently to improve in-stocks, improve customer experiences online and in-stores and will rely on suppliers to help make that happen in part by providing better product content beginning April 1.

She said Walmart eCommerce is about having many products and expanding assortment with good quality descriptions as the retailer again hammered home the need for suppliers to provide more item content to the retailer in order to enhance online and in-stores in concert. At the very minimum, Ewing said good content includes:
• Powerful, concise title
• Multiple images and videos
• Full product attributes
• Substantive reviews as well as questions and answers.

Ewing told suppliers there will be a new process to add online content coming their way April 1. She said 10 companies have been approved for suppliers to work with to upload content to Walmart.com. She said after the in-store items are built up online, Wal-Mart expects suppliers to “top if off” with additional content for its online presences.

Ewing also outlined the following steps Walmart U.S. is taking to ensure that store items are sold online.
• Step 1: Store buyer negotiates the cost for store and .com purchase. The suppliers are asked to send in a sample of the product in its final packaging.
• Step 2: Order specialist build the item for stores using the current content process and that store information is then loaded into Walmart.com item file.
• Step 3: As of April 1, suppliers will be required to add online description, image and product features through using the Walmart supplier center help or a third-party content service provider.
• Step 4: All items should be online accurate and complete within six weeks prior to the item launch.

Ewing also discussed several ways Walmart U.S. and Walmart.com plan to optimize the supply chain. She said suppliers must ensure accurate case and product dimensions and when possible make the item conveyable among the various channels of in-store and online fulfillment which can vary widely. She said the latter is a must as consumers want to get their product in multiple ways today.

Ewing said the same fulfillment centers for Walmart.com are now being used for Jet.com. This should simplify the back-end for most suppliers. For instance, once a product is set up by a buyer on Walmart.com, it should flow to the other sites such as Jet.com. If the supplier doesn’t want to sell on the other sites they can work with the category manager to avoid that happening.

She said if suppliers are shipping directly to fulfillment centers the online replenishment team will handle. Otherwise, the Bentonville replenishment team will handle.
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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.