Maximizing Walmart Success: Insights from 8th & Walton’s Jeff Clapper

ExpertCPG Commerce Podcast
ExpertCPG Commerce Podcast
Maximizing Walmart Success: Insights from 8th & Walton's Jeff Clapper
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ExpertCPG Commerce Podcast: Episode 2

Dive into the world of retail mastery with Jeff Clapper of 8th & Walton, as we explore the key strategies for thriving as a Walmart supplier. Uncover the secrets to leveraging Walmart’s ecosystem for sustained growth and the innovative ways brands can navigate the retail giant’s expectations. Perfect for brands eyeing the vast opportunities within Walmart’s stores and online platforms. Don’t miss out on elevating your brand’s presence and profitability on Walmart.

For a Free ExpertCPG Amazon & Walmart Audit, to get valuable insights, strategy tips, actionable ways to boost your Amazon sales, and ways to increase your brand’s visibility and growth, visit https://go.expertcpg.com/amazon-audit to sign up and begin your journey to success.

Podcast Video

About our Guest

 

JEFF CLAPPER

8th & Walton – CEO

 

Bio:

As CEO of 8th & Walton, Jeff Clapper leads the company’s mission of helping suppliers become better partners with Walmart through expert guidance and education.

Since acquiring 8th & Walton in 2014, Jeff has achieved over 10x growth by developing solutions that empower small and medium Walmart suppliers to succeed on their own. Jeff is grateful to the team of dedicated, curious, and caring professionals at 8th & Walton, who have made a positive impact on the community in Northwest Arkansas and the world, by way of the guidance they provide to suppliers’ with their biggest customer.

Jeff’s retail career began as the Newsstand Sales Director for magazine publisher, Pack-O-Fun, Inc., overseeing key national retail accounts, including Walmart. Later, he led the $11MM business as its Publisher, orchestrating its sale to Amos Press, Inc. in 2006. In 2007, Jeff raised over $1M to launch an online video game business, eventually selling it to World Golf Tour in 2010.

In 2022, 8th & Walton achieved B Corp certification, marking the second B Corp in Arkansas. Actively engaged in conscientious business communities like B Lab and Small Giants, Jeff champions the idea of business as a force for good. Committed to building a more empathetic community, Jeff also serves on nonprofit boards for organizations dedicated to enhancing access to the art
s and education, such as the Walton Arts Center and Ovations.

 

Contact Information:

jeff@8thandwalton.com

www.8thandwalton.com

 

 

Podcast Video Transcript

00:03:05:11 – 00:03:13:02
Unknown
tell us a little about Ethan Walton. You know, what you guys do and kind of you know, who what kind of customers you guys serve.

00:03:13:05 – 00:03:16:22
Unknown
Sure. Yeah, we. Ethanol’s been in business almost 20 years,

00:03:16:22 – 00:03:26:16
Unknown
providing education and guidance to Wal-Mart suppliers. So that’s all the product companies that have anything on the shelves in the Wal-Mart stores or on Walmart.com

00:03:26:16 – 00:03:27:13
Unknown
and

00:03:27:13 – 00:03:54:13
Unknown
we’ve been teaching thousands and thousands of people every year for, you know, for all that time. And those are, you know, the product companies that are well-established, you know, global brands, you’d know, well, the the tea bags and Coca-Colas and those kinds of companies that have established teams that want to be best in class and collaborative building, building a great business with Wal Mart, that’s where we started off is teaching the team members of those large organizations and then

00:03:54:15 – 00:04:15:10
Unknown
over the years recognize that small and medium businesses, whether training was the right solution, one, two, three day classes on sales and analytics and supply chain and accounting, we’re teaching those teams and then also in many cases now we we really serve more as a consultative guides to those companies in in terms of helping them understand

00:04:15:10 – 00:04:20:17
Unknown
how to maximize their sales and profitability and the overall opportunity that they have with Wal Mart.

00:04:20:21 – 00:04:22:22
Unknown
And again, that can be on all the same kinds of

00:04:22:22 – 00:04:24:05
Unknown
facets. So

00:04:24:05 – 00:04:44:13
Unknown
sales strategy, communication with your buyer, replenishment, supply chain, production, planning operations, accounting, really all of the things that I that are best in class Wal mart supplier needs to know. We can either teach teams in a in a classroom setting or we work with suppliers over a period of time really getting their team

00:04:44:13 – 00:04:48:00
Unknown
well-informed and up to speed on those best practices.

00:04:48:00 – 00:05:07:15
Unknown
Yeah. I mean, that’s a ton. I mean, it’s funny when you say all that. You know, I’ve chatted before about Walmart in different things, right? But it’s I don’t think the obviously, the the general public is in India, but even brands that are getting into retail, obviously Walmart is like the enter pound gorilla. Right. And it’s kind of like I tell people the same thing with Amazon.

00:05:07:15 – 00:05:11:01
Unknown
It’s like it’s their way or the highway. Like you’ve got to follow their

00:05:13:20 – 00:05:16:18
Unknown
scale of these companies, right, whether it’s Amazon, Walmart, whoever,

00:05:16:18 – 00:05:26:18
Unknown
they need to have the structured systems and there’s ways to do things, ways to communicate, ways to get product in and these certain sales things you have to meet and again, I don’t think,

00:05:26:18 – 00:05:32:13
Unknown
maybe even people in the in the space understand all the all the complexity that go into it right.

00:05:32:13 – 00:05:46:05
Unknown
yeah, for sure. You know, it’s funny, I just had a conversation a couple of weeks ago. There’s a client we started talking with about a year ago. They were going to start shipping to Wal Mart a couple of months past when we started talking, you know, early spring of 23.

00:05:46:05 – 00:05:49:01
Unknown
and as we’ve just, you know, we’re nearing the end of the year of working with them.

00:05:49:01 – 00:06:05:12
Unknown
And he said, I think for a minute we thought we could do this on our own. We didn’t think there was going to be that much complexity or demand of knowledge and expertise and how we were going to execute this. And I was so wrong, and I’m so glad that we got to work with you guys. So it could have been it could have been disastrous.

00:06:05:12 – 00:06:10:23
Unknown
And instead they’re going to have a really great launch. They’ve had a great launch, so they’re going have a great career with Wal Mart. So

00:06:10:23 – 00:06:15:00
Unknown
exactly to your point, I mean, it’s a complex and demanding account

00:06:15:00 – 00:06:20:08
Unknown
and Wal-Mart is ever changing. I think that’s that’s one of the things I always like to credit them on their dynamic.

00:06:20:08 – 00:06:22:21
Unknown
They don’t rest on their success.

00:06:22:21 – 00:06:34:10
Unknown
And so they are always evolving and improving. And as a as a result, of course, that creates change in and expectations and requirements and practices for everyone around the business, namely, of course, in this case, the supplier. So

00:06:34:10 – 00:06:39:14
Unknown
not only is a complicated, like you said, but it’s always going to be changing and for the better for the most part.

00:06:39:14 – 00:06:45:14
Unknown
So that’s that that creates a really good, meaningful, neat place for us to, to provide support and value.

00:06:45:14 – 00:06:52:03
Unknown
yeah. And we’ve got a company like you know com days Walton like when would they, you know, engage with you guys reach out to you guys

00:06:52:03 – 00:06:53:07
Unknown
the journey of their,

00:06:53:07 – 00:06:53:11
Unknown
life

00:06:53:11 – 00:06:54:02
Unknown
lifecycle.

00:06:54:09 – 00:07:06:02
Unknown
know, there are there are a couple of places where we often start talking about two or three that I’ve mentioned just in a in a high level conversation. One is, you know, maybe a VP of sales or a president who just got a yes from a buyer.

00:07:06:08 – 00:07:18:22
Unknown
They said, you know, we want to take you in a couple hundred stores, maybe a couple thousand stores, and they’re thinking, okay, great, we celebrated for 5 minutes and now we’ve got to figure out how we’re actually going to do this. And so we we come in and work with them on, you know, how are you going to set up your supply chain?

00:07:18:22 – 00:07:36:02
Unknown
How are you going to set up your items? Some of the initial work that happens from when you got the yes to when you start shipping. And then there’s a lot of work that happens week to week as an actual supplier. And so in how are you how are you forecasting orders and planning and production? And if you’re, you know, bringing products from outside the US, how are you planning around all of that?

00:07:36:02 – 00:07:59:22
Unknown
And then how are you communicating what’s working with Wal-Mart? How are you communicating challenges? Maybe there are opportunities. You could be performing better where you have distribution. If you make adjustments to the forecast, how do you analyze and share that back to Wal-Mart? So anyway, we’re oftentimes starting with a sales lead. Who’s got the relationship going? And we’re here to provide a lot of guidance and support behind the scenes for that person and their team across their organization.

00:08:00:11 – 00:08:19:13
Unknown
In other cases, you know, we work with suppliers that are have been in Wal-Mart for decades. Maybe they’re already doing up to $100 million a year with Wal-Mart. And it’s oftentimes, again, it’s a VP of sales, but they don’t have anyone dedicated to Wal Mart. So it’s not the business is not necessarily to a size, but they’re going to have two or three or maybe even dozens of people working on Wal-Mart.

00:08:19:15 – 00:08:38:04
Unknown
But they have a warehouse manager, they have a production manager, they have all these people and they’re trying to figure out, again, how do we make the most of this opportunity? And and maybe there are stuck. You know, Wal-Mart has certain programs, compliance programs that can result in the can results in growth, in sales, but they can also result in penalties and costly penalties to a business.

00:08:38:04 – 00:08:54:22
Unknown
So sometimes that conversation begins with, hey, we’re getting up, you know, five figure a month, stiff penalties from Wal-Mart right now. How do we fix that or Stuart is another program they’ve launched a little bit more recently. What is this about? How do we understand it? How can we fight it? You know, those kinds of questions will come up even with established suppliers.

00:08:54:22 – 00:09:11:22
Unknown
And so that’s another place we might start, is we’re doing 5 to $100 million a year with Wal-Mart. We don’t have the internal expertise on Wal-Mart. Can you help us figure this out? So that’s a fairly common common spot to is established and looking for a guide and a resource to help them really understand

00:09:11:22 – 00:09:13:09
Unknown
best practices with Wal-Mart,

00:09:13:09 – 00:09:31:06
Unknown
obviously, what we’re we talk Walmart, right? And we talk about there’s obviously Walmart in store, the traditional. Right. But then there’s obviously the e-commerce side. Right. Which will definitely can delve into a little bit, but particularly in store. Right. Because that’s I think kind of the the black box that people think of are don’t know as much about than maybe the

00:09:31:06 – 00:09:33:05
Unknown
marketplace platforms thing like that.

00:09:33:07 – 00:09:33:16
Unknown
You know, what

00:09:33:16 – 00:09:37:22
Unknown
what’s it brands really know when when dealing with Walmart when getting in the store

00:09:37:22 – 00:09:39:10
Unknown
Yeah,

00:09:42:18 – 00:09:43:08
Unknown
sure.

00:09:43:08 – 00:09:55:12
Unknown
Yeah. You know, it’s a great question. And and I know a lot of your you know, your business background and probably a lot of the brands that you connect with so well are maybe starting more with an e-commerce or marketplace

00:09:55:12 – 00:10:07:13
Unknown
three piece sort of approach and a lot of success there. And and in contrast, when you start talking about shipping into Wal-Mart, you know, you’re going to get you’re not shipping to, you know, a couple of fulfillment centers.

00:10:07:13 – 00:10:12:16
Unknown
You’re shipping to maybe dozens of DCS large quantities on a weekly basis.

00:10:12:16 – 00:10:14:20
Unknown
and then, of course, they’re shipping out to stores from there.

00:10:14:20 – 00:10:21:17
Unknown
so that’s a different level of complexity in that regard. And then I think overall, strategically, probably one of the big differences is

00:10:21:17 – 00:10:28:08
Unknown
it’s not a week to week like, hey, we started off filling, you know, we we sent them five units and then we sent them 20 and then we sent them 100.

00:10:28:08 – 00:10:47:00
Unknown
This is like right out of the gate. We’re getting thousands of units shipped out every week. You know something maybe less than that after your initial fill. But you have about you have about three months before Wal-Mart’s really going to start looking at that data and saying, okay, is this working in the space we’ve allocated or not? Because you’re always fighting for that space on a very finite shelf.

00:10:47:00 – 00:10:49:06
Unknown
It’s not an endless shelf, of course. And so,

00:10:49:06 – 00:11:02:22
Unknown
I think some of the metaphors I’ve heard in, you know, maybe you’ve we’ve talked about is it is not is not a baseball game where you’re guaranteed nine, nine innings of this game is going to go until it plays out. We have we have some understanding.

00:11:02:22 – 00:11:23:19
Unknown
I mean, basically every 6 to 12 months, Walmart is going to be reevaluating your place on the shelf. And you know, and if it’s performing great and if it’s not, you’re going to have to move on. And that can have to do with, you know, how it’s selling based on consumer demand. And it can also have have to do with how well are you actually filling orders if there is a gap on the shelf because you’re unable to fill the orders that they’re placing,

00:11:23:19 – 00:11:25:17
Unknown
that’s not going to be a lasting issue.

00:11:25:17 – 00:11:38:23
Unknown
You get a little bit of a grace period as a new supplier. But understandably, of course, they you know, they’ve got to make the most of that space. They’ll work with you, but only up to a point. So you’ve got to be you’ve got to come in strong from the start and make the most of it and be ready to continue to deliver

00:11:38:23 – 00:11:51:23
Unknown
Yeah. And I’m sure nothing frustrates either a store manager, a buyer, or anybody up the chain, you know, up and down the chain, more than, say, an empty spot on the shelf. Right where there’s where there could be something else they could put there or have more of the existing product right

00:11:51:23 – 00:11:53:03
Unknown
for sure.

00:11:53:03 – 00:11:53:19
Unknown
in the store.

00:11:53:19 – 00:11:57:06
Unknown
and you talked about, too, before, like there’s all these different initiatives

00:11:57:06 – 00:11:58:08
Unknown
that Walmart rolls out, right.

00:11:58:08 – 00:12:10:02
Unknown
Just like any of these different retailers. But I mean, Walmart particular, like what about those initiatives they kind of brands to be aware of, especially if they’re entering Walmart in store for the first time.

00:12:10:02 – 00:12:28:20
Unknown
you really think about Wal-Mart as as a distributor and they are trying to maximize the flow of their product from the suppliers warehouse all the way through to the end consumer and so a lot of the programs and the initiatives that you’re referring to have to do with the consistency of your operation and your delivery to Walmart.

00:12:28:20 – 00:12:35:00
Unknown
So, you know, there’s a few acronyms that come into play here. What I mentioned is Otis on time in full.

00:12:35:00 – 00:12:48:03
Unknown
It sounds so simple when you say, Hey, we want you to send us everything we ordered by the date. We asked for it like, okay, great. But they have a high bar and the goal there is to maximize, as you just said, the space that they’re allocating on the shelf.

00:12:48:03 – 00:13:04:13
Unknown
If you are filling orders, that’s difficult. If you’re not delivering when they expect you to, that’s difficult, of course. So that’s in the in the spirit of maximizing the space that you have at the shelf through consistent delivery. Another big one in the last couple of years is Skippy the Supplier Quality Excellence program. And these are all

00:13:04:13 – 00:13:10:15
Unknown
standards that they have implemented and then continued to develop and sort of again, kind of raise the bar over time

00:13:10:15 – 00:13:12:00
Unknown
in the name of

00:13:12:00 – 00:13:16:12
Unknown
streamlining and automating their supply chain as much as possible.

00:13:16:12 – 00:13:49:05
Unknown
And so it has to do with the, you know, how many sides do you put a barcode on your on your case and what kind of ink is in the label and what’s the quality of your pallets coming in and things that, you know, you might never think about again, particularly if you’re the VP of Sales or the president of the company, and you’ve got a broad responsibility or your focus is on the relationship, but it’s not necessarily on the product and how it’s flowing through the system, but understanding those things like, you know, coming back to your question, understanding Wal-Mart’s expectations for that product flow is really critical to your long term success,

00:13:49:05 – 00:13:55:07
Unknown
sir.

00:13:55:07 – 00:14:12:21
Unknown
Well, and I’m sorry, I was just going to say, is the as you know, the shopper in the store, you’re just like, wow, this, you know, my my milk just shows up here and and it doesn’t. Yeah.

00:14:17:00 – 00:14:24:00
Unknown
we talked about about you know, getting into stores right maybe getting that initial maybe a brand entering Walmart for the first time getting that.

00:14:24:00 – 00:14:46:13
Unknown
Yes. Like you said, you know, you know, doing a quick celebration, but then realizing, okay, we’ve got a we’ve got to get in, we’ve got to do this right. And number of stores. Is there any rhyme or reason to that? I mean, does it just depend on the item, the market, the the demographics that item may serve? I mean, I’m sure there’s no like formula that, you know, or that Walmart provides, but because

00:14:46:13 – 00:14:48:11
Unknown
it’s kind of a faulty question,

00:14:48:11 – 00:14:53:11
Unknown
could be a number of different DCS as well that doesn’t just reflect the number of stores you correct.

00:14:53:11 – 00:15:00:14
Unknown
right, right. Yeah. I mean, and there’s there’s a lot of interesting ways to to kind of take on that question.

00:15:00:15 – 00:15:14:13
Unknown
You know, roughly speaking, one DC will ship to about 100 stores. And so, you know, when you’re talking about being in, let’s just say 4200 stores, you might be shipping to about 42 ship points per week.

00:15:14:13 – 00:15:26:19
Unknown
but then there can be some inefficiency that happens there, too. If a buyer, you know, depending on how it’s analyzed by the buyer or the category manager, they might say, here are stores that match demographically where we think this product will sell best.

00:15:26:19 – 00:15:40:13
Unknown
And as a result, you may end up shipping to, you know, a DC here that is going to ship on to five stores and a DC here that’s going to ship on to ten stores. And you know, you could still end up shipping the 42 discs,

00:15:40:13 – 00:15:45:16
Unknown
only be in, let’s say 600 stores or 800 stores. And so there can be inefficiency in that.

00:15:45:16 – 00:15:51:18
Unknown
And that can also come back around to be an opportunity with Wal Mart where you might say, hey, we’re shipping to 20 D seas

00:15:51:18 – 00:16:02:18
Unknown
and we’re only in half the stores that they serve. So could we look at expanding so that all of those disks are shipping to all of the stores that they serve? You know that Wal Mart’s already allocating labor and space in those dishes.

00:16:02:18 – 00:16:08:03
Unknown
If you’re if you’re not cross docked, they’re already allocating space to you. So let’s maximize that opportunity.

00:16:08:03 – 00:16:11:11
Unknown
But anyway, yeah, I mean, in terms of what you can expect, it can really run the gamut.

00:16:11:11 – 00:16:19:11
Unknown
I would say the one thing I’d say to a new supplier on that front is just be upfront about your capacity to produce with Wal Mart

00:16:19:11 – 00:16:22:15
Unknown
because again, back to your watch out earlier, it’s a bad scenario.

00:16:22:15 – 00:16:38:21
Unknown
If you come back after a month or two and say, we just don’t have the capacity to fill. We got all excited when you offered us 4000 stores, but we could probably only really handle 500. At least today. You’re going to be in a much better position long term if you just own that on the front side and say we can really, really do well.

00:16:38:21 – 00:16:43:11
Unknown
Filling orders for 500 stores today and we’d love to work our way up to that 4000 stores.

00:16:43:11 – 00:16:46:17
Unknown
So yeah, the communication on the front side is really how are you going to build trust

00:16:46:17 – 00:16:52:18
Unknown
now? That’s right.

00:16:53:18 – 00:17:09:10
Unknown
You know the work you guys are done with N what is there is there a maybe a success story or a line of words that comes to mind that was like, you know, a great, you know, great set for what you guys do and a great fit for Walmart as well and a great fit for the brand.

00:17:09:11 – 00:17:17:09
Unknown
It’s kind of one of those when, when, when, where, you know, obviously the brand wins a lot as well in terms of increasing their presence and their sales.

00:17:17:09 – 00:17:28:16
Unknown
Yeah. You know, we are glad you said the you know what? You just did about win, win, win. That is always what we’re looking for is solutions that are going to produce great outcomes for the supplier and Wal-Mart.

00:17:28:16 – 00:17:32:18
Unknown
And and as a result, of course, that’s going to reflect well on our brand and what we do. So,

00:17:32:18 – 00:17:38:22
Unknown
a lot of those have to do with collaborative planning. You know, an example, there could be

00:17:38:22 – 00:17:54:01
Unknown
we just have this happen with a company we’ve helped launch. We started working with the many years on the US business and now in the last maybe six months, they’ve been growing into Walmart, Canada stores and then they and then they’re in their presence in Canada, which is relatively new.

00:17:54:03 – 00:18:04:21
Unknown
There were some situations where the Walmart forecast, the order forecast was not it was kind of level. And we knew that the that this particular item had a really strong velocity in the U.S. stores.

00:18:05:04 – 00:18:22:04
Unknown
And so basically it was kind of throttling what they were selling where they already had distribution, just, you know, to to give it to give it a more simple to simplify the example, maybe they were carrying five units on hand in these stores and we were expecting them to be able to sell 20 a week and they were selling out of those five by Tuesday every week.

00:18:22:08 – 00:18:48:05
Unknown
And the forecast wasn’t saying we should order six or eight or ten. And so every week we just saw the ceiling was five because that’s all that was on hand. And so we were able to present an analysis of all the stores where we really could be expecting much higher velocities. And they and the their counterpart inside of Walmart said, yes, let’s make a manual increase here based on this insight that now their sales have grown significantly since Walmart started ordering more, basically with that override of the forecast.

00:18:48:05 – 00:18:53:12
Unknown
So we’re always looking for those strategies and the analysis that will produce growth where we can.

00:18:53:12 – 00:19:10:19
Unknown
That’s also. That’s a great story, right? It’s always fun to head those those wins as well, where people just don’t know the background of it. And, you know, again, people always think you can either think you can mainly override things and you can’t, or sometimes you can if you present the right data, right?

00:19:10:19 – 00:19:27:22
Unknown
those scenarios, you’re not really asking for a another level of risk or you’re not asking the buyer to, to take on more items or more stores, you’re growing where they’ve already given you distribution just by maximizing the supply chain and its capabilities.

00:19:27:22 – 00:19:32:23
Unknown
So again, that’s a win for Walmart. It’s just to look for those kinds of insights.

00:19:32:23 – 00:19:53:09
Unknown
maybe correct me if I’m wrong, but I mean, is that kind of what a buyer or, you know, they look at in terms of performance, is it kind of like the revenue on the shelf space like that little, you know, sales or profit per per cubic inch or whatever on the shelf And is it sell through or those kind of the two of the big metrics that they look for, they’re maybe constrained by as well.

00:19:53:09 – 00:20:06:03
Unknown
Yeah, I mean, that’s yeah, you’re absolutely right. They’re always looking at the whole category. And so, you know, again, a great supplier is going to help them assess the whole category and not just what’s in it for them with their, you know, 1 to 5, however many items.

00:20:06:05 – 00:20:18:05
Unknown
But how is this going to fit in the category? What is this going to? Because in most cases, you’re going to take the place of another product. So how is this going to elevate the the dollar production of this category for the buyer?

00:20:18:05 – 00:20:23:20
Unknown
and what need is it going to sell in your assortment? How is it going to address a need or a gap or raise the bar of the category

00:20:23:20 – 00:20:24:14
Unknown
other factors?

00:20:24:14 – 00:20:45:07
Unknown
I think you kind of touched on one of them is just what’s the profitability? What’s the margin? Really, the gross GMA ROI is the gross margin return on inventory. And so and so Wal-Mart’s looking at, you know, if we can this is another win for us recently. If we can reduce the inventory and maintain our sales, this is a more profitable item for us.

00:20:45:07 – 00:20:50:05
Unknown
And so finding ways to do that. But you other there are several key metrics and you just named a couple of the big ones.

00:20:50:05 – 00:21:18:11
Unknown
yeah. So it’s just a little bit to talking about, you know, Walmart, the marketplace, right? The the third party marketplace. Walmart has a walmart.com and obviously Walmart, you know, wants to compete with Amazon and they’ve made a, you know, they started I mean, I don’t know when the three few Marketplace launch it was probably, gosh, five seven years ago maybe it was shorter than that long that I can remember now they’ve built a bigger push in more recent years of of getting brands on there and onboarded.

00:21:18:13 – 00:21:33:21
Unknown
But obviously it’s it’s a it’s a it’s a seller marketplace. It’s a it’s a3p relationship where you’re selling kind of through Walmart.com and they’re taking the commission and you’re selling the orders. But and obviously the net kind of is coming to you after the fees and such.

00:21:33:21 – 00:21:41:02
Unknown
How does that play into like obviously, you know, getting into store potentially or just have the visibility on Walmart.com?

00:21:41:02 – 00:21:47:21
Unknown
Or do you see that as a big growth area in Jennifer Walmart and for brands and the future here?

00:21:47:21 – 00:21:54:08
Unknown
Yeah. I mean, Wal-Mart brought the merged basically their dot.com and brick and mortar buying teams a couple of years back.

00:21:54:08 – 00:21:58:20
Unknown
And so really now address the entire business as an omni opportunity.

00:21:58:20 – 00:22:00:00
Unknown
and exactly like you said.

00:22:00:00 – 00:22:25:12
Unknown
Now, that has enabled a lot of suppliers to get a start on the shelf in the stores because of solid production and and results on AECOM. It gives buyers also an opportunity to say, hey, what you’re doing looks neat. It’s intriguing. Get your get your item set up on Marketplace. Let’s see how they produce, how they perform. And then let’s come back around and look at it for the stores once we’ve got some more data there.

00:22:25:12 – 00:22:41:08
Unknown
So that is a really key starting point for a lot of suppliers. Now. It gives buyers instead of just saying, No, I’m not going to put you on the shelf, it kind of gives you a new lower gear rather than going from, you know, neutral to fourth gear. Now you’ve got first, second, third gear maybe before you get there.

00:22:41:11 – 00:22:57:18
Unknown
I’m kind of making that up. But I think that I think that is definitely the play we’ve seen. And so more and more suppliers have that. In fact, I was on a call just earlier today and and it was someone responsible for e-commerce across several business divisions within a large company.

00:22:57:18 – 00:23:01:15
Unknown
And we were talking about some of those divisions have a brick and mortar sales lead.

00:23:01:15 – 00:23:18:07
Unknown
Some of them don’t. But the work that this person will be doing on ecommerce will likely drive brick and mortar opportunity for the leaders in brick and mortar of those divisions. And so it’s you know, there is a murkiness that comes from that when you take that on from the supplier side, of course. But he had a good he had a good outlook on it.

00:23:18:07 – 00:23:19:07
Unknown
So that was neat.

00:23:19:07 – 00:23:40:06
Unknown
Yeah. When you mentioned omni channel on the Walmart side, it’s like you said, your is a friend of the story, right? It’s the same thing on the supply player side, right? Like, it’s because it’s like all these things are, you know, going into each other, whether it be someone, you know, hears about your brand on Instagram and they find you on Amazon, they find in the shelf in Walmart or wherever it is, right?

00:23:40:06 – 00:23:40:22
Unknown
You’ve got to kind of

00:23:40:22 – 00:23:47:09
Unknown
have all those things in mind. So it’s a lot of balls in the air. Definitely when it comes to being a brand and things you got to watch for.

00:23:47:09 – 00:23:51:23
Unknown
So in terms of, you know, we talked about like Marketplace obviously in store, but like,

00:23:51:23 – 00:23:58:13
Unknown
you know, I know Walmart, just like, you know, I would not always equate with Amazon, but like Amazon’s always go with new initiatives, new programs.

00:23:58:18 – 00:24:15:08
Unknown
I know Walmart does as well. What are some things that are maybe coming out or just come out or coming on the on the horizon here that maybe brands who are in Walmart or maybe, you know, talking to Walmart now or looking to get to Walmart in the next year or so, kind of need to be aware of or need to have on the radar.

00:24:15:08 – 00:24:35:04
Unknown
One of them I mentioned earlier is is certainly the continued push to automate their supply chain wherever they can. That just streamlines the, you know, the consistency, the flow, the velocity of products through the supply chain. That’s good for everybody. And it comes with expectations that we’ve talked about another sort of the

00:24:35:04 – 00:24:41:18
Unknown
probably one of the most top level bullet points in the Walmart space right now is a rollout of a program called Illuminate.

00:24:41:20 – 00:24:49:17
Unknown
Companies that have been with Wal Mart for years, are probably already familiar with illuminate is going to take the place of one of the key components

00:24:49:17 – 00:24:55:10
Unknown
of a system called retail link retailing because Walmart’s proprietary platform for

00:24:55:14 – 00:25:03:22
Unknown
reporting and analytics to suppliers. So within retailing there’s something called DSPs. This is the pardon me decision support and that will actually be sunset.

00:25:03:22 – 00:25:25:20
Unknown
So decision support has been out for decades. Suppliers have relied on that to analyze their business with Wal Mart to to know, you know, what are the what orders should we be expecting and what are we you know, all kinds of aspects of the business. What are our sales marketplace? All kinds of information suppliers have turned to DSPs within retailing for many decades, and that will go away in a few months.

00:25:25:22 – 00:25:50:14
Unknown
It will be replaced by a system. So that’s actually really, really big news for the whole Walmart vendor community right now. It will be replaced by a system called Illuminate, which is available now. And there are kind of two levels of of service. With Illuminate, there’s a free basic platform and there is a charter platform which costs money proportionate to the dollar volume you do with Walmart.

00:25:50:16 – 00:25:55:23
Unknown
And and there’s there’s a bunch of additional information you get as a charter subscriber.

00:25:55:23 – 00:26:07:04
Unknown
And then the basic version from everything we’re seeing right now will continue to allow suppliers to manage their business day to day, which is great news and so yeah, that’s that’s probably the big, big bullet point out there right now.

00:26:07:04 – 00:26:08:13
Unknown
Yeah. I mean, alphabet soup.

00:26:08:13 – 00:26:11:23
Unknown
This

00:26:40:15 – 00:26:45:05
Unknown
yeah, yeah. Sorry. You know, I think one of the big things as you’re kind of referencing

00:26:45:05 – 00:26:47:23
Unknown
Amazon and Walmart and how they how they mix out

00:26:47:23 – 00:26:54:03
Unknown
know of course Amazon has a U.S. technology business effectively and then they also have their retail business

00:26:54:03 – 00:27:03:02
Unknown
and Walmart primarily is just the retail business. And so they’re they’re trying to remain competitive and innovative and they’re saying, how do we compete with a company that is both tech and retail?

00:27:03:06 – 00:27:22:08
Unknown
We need to open up a new model, a new channel. And so that’s Illuminate is one of several initiatives that are really designed to be entrepreneurial and say, look at the entire base of assets. We have screens in the stores and trucks all over the road and stores everywhere, all of these assets. How can we leverage them to open up new business models?

00:27:22:08 – 00:27:44:13
Unknown
They’re doing last mile delivery with Home Depot as a pilot right now. That’s a new business that they’re trying to invent out of the assets that they already have in place. Again, Illuminate is one of those initiatives. It’s to say we have all this data. How can we sell that and monetize that in some way? So, yeah, I mean, I think they’re there again, to their credit, being entrepreneurial and dynamic and trying to continue to invent and reinvent themselves.

00:27:44:13 – 00:27:47:14
Unknown
And in New and meaningful ways. So we’ll see how it goes.

00:27:47:14 – 00:28:05:06
Unknown
Yeah. Yeah. And for sure. And I think and I, you know, and again, to compare and contrast, the two of Amazon and Walmart, but like, obviously Walmart, like you mentioned, Amazon makes a lot of their money from us, but a big growth factor in there. And the river of J broken out in the last, what, six, 12, 18 months is now advertising.

00:28:05:06 – 00:28:27:19
Unknown
Right. And how much money and how the growth in that so I’m sure that’s very a Wal-Mart’s looking at it especially in the May marketplace. How would you comment on it that also I don’t know if you want to talk about at all Walmart fulfillment services, which, you know, kind of is not an unknown thing, but it’s kind of, you know, they’re answer answered FBA in a way potentially and getting it and having Walmart fulfill those items.

00:28:27:19 – 00:28:43:14
Unknown
And when we’ve compared for clients, it typically actually is cheaper to fulfill, you know, to fast than doing like multichannel fulfillment from Amazon or something. Even FBA for some time so. Yeah. Any, any thoughts on those the advertising or the stuff.

00:28:43:14 – 00:28:55:13
Unknown
You know, you kind of did a did a better job covering the points than I did, actually. I mean, which is great. Yeah, but Walmart connect on advertising. On Walmart again, is is that opportunity to say, what assets do we have?

00:28:55:13 – 00:29:17:17
Unknown
We’re having all these pages. You know, how many millions of page views every day. What can we what can we make out of that business opportunity? And so, yes, selling advertising on Walmart, just like with Amazon is a great one. And then the fulfillment services is another one. And so in fact, there’s kind of a loop there. I think that you could start to see where buyers are saying, Hey, before we try you on the shelf, let’s see you on Marketplace.

00:29:17:19 – 00:29:40:18
Unknown
By the way, we can help you fulfill those orders through WSI. So it’s kind of it’s going to be interesting to see how that plays out. And, you know, the Walmart advertising, I think they have they have because of the proximity of stores to consumers everywhere. I think there’s going to be a really interesting, you know, sort of drives the pickup today.

00:29:40:18 – 00:29:56:12
Unknown
And all of the all of the distribution options for consumers are very different on Walmart than they are on Amazon. When you think about all of America, not just, you know, you know, kind of not just key areas. And so I think advertising on Walmart will be a big growth area for the company.

00:29:56:12 – 00:30:31:02
Unknown
you know, someone who lives in, you know, more of a rural area that still does has a Walmart in very close proximity, even doing like the groceries on Walmart and just the search now on the app. I mean, it’s interesting how it’s, you know, you can obviously select and store, but if you’re searching for a particular product, kind of a niche product and it’s they don’t have in store it can still get to you like the next day from a D.C. or somewhere else which is really interesting for in the customer standpoint where it’s like, okay, I can maybe order my staple groceries like my, you know, nonperishable

00:30:31:02 – 00:30:52:00
Unknown
goods from Walmart, right? The kids snacks for school and everything else. But then also I want these this niche supplement or this niche drink or whatever it is, right? And then all of a sudden it just shows up at my door the next day. That’s one seamless. So that’s really how it’s operating now. And I don’t think as many consumers are aware of that yet, that that is it’s that powerful, frankly.

00:30:52:00 – 00:31:08:14
Unknown
Well, you know, and we’re seeing stores are are actually adjusting the breakdown of real estate in the store with more space being allocated for the sale settlement of online orders out of that store. So it’s becoming more like a micro DC within the store

00:31:08:14 – 00:31:15:08
Unknown
and know I mean, there’s there’s going to be more and more shift to those kinds of opportunities and channels for Mart, you know and of course they’re experimenting with other stuff.

00:31:15:11 – 00:31:37:02
Unknown
Certainly here in Bentonville and Northwest Arkansas, they’re experimenting with helicopter drones and airplane drones and how else can we get products to the people who live within just a few miles of the store? So, yeah, I mean, lots of opportunity. Again, going back to that asset base of for you know, for more than 4000 stores across the U.S., How do we how do we make the most of all those stores and the proximity that they have to to people everywhere?

00:31:37:02 – 00:31:52:08
Unknown
And what about other trends, Jeff, in the space but maybe related to mostly, you know, less about like CPG products, right? Anything else that they need to be aware of or anything else that, you know, maybe what’s on the horizon for for that category or those categories?

00:31:52:08 – 00:31:54:01
Unknown
you touched on grocery.

00:31:54:01 – 00:32:00:02
Unknown
That is a key area for Walmart. There’s a lot of velocity and investment there,

00:32:00:02 – 00:32:05:09
Unknown
a lot of innovation that Walmart’s trying to drive through through the grocery channel

00:32:05:09 – 00:32:10:01
Unknown
And at the same time, I mean, general merchandise, when you’re like, hey, I need to get I need a new lawnmower.

00:32:10:01 – 00:32:30:02
Unknown
And I’m not I don’t want to order that online. I just need to get out, cut the grass today. I’m picking random examples, I guess. But you know, but they have the whole store right there. If you’re stuck on most in most cases, a supercenter today. And so to be able to go get a lawnmower within a couple of hours, that’s while you’re also picking up your eggs and milk,

00:32:30:02 – 00:32:31:03
Unknown
that’s pretty powerful

00:32:31:03 – 00:32:33:13
Unknown
terms of innovation for those brands.

00:32:33:13 – 00:32:38:20
Unknown
I think it’s going to be around advertising. There may be opportunities for illuminate data,

00:32:38:20 – 00:32:52:17
Unknown
certainly with the larger suppliers who have resources to get it and to dedicate to the subscription and to the analysis of certain data that can come from illuminate that will be an opportunity for probably for larger brands, at least for the foreseeable future,

00:32:52:17 – 00:33:00:01
Unknown
you know, but for the most part and so many brands is just going to be about going all the way back in our conversation, just filling orders.

00:33:00:04 – 00:33:23:07
Unknown
We heard the Walmart executive, you know, a couple of years ago, they said if we made more omnichannel data available to you, we don’t know what you would do any differently. We just need you to get the product to our DC. When we ask for it. And so, you know, because like so, you know, at the end of the day it’s, it’s complicated and it’s simple.

00:33:23:09 – 00:33:31:11
Unknown
And I think if brands continue to focus on the really kind of unsexy work of that consistent supply chain, that’s going to be their biggest opportunity for success.

00:33:44:10 – 00:33:47:06
Unknown
Right, Right.

00:33:50:05 – 00:33:54:17
Unknown
Yeah. Yeah. You totally get it. Yeah.

00:33:54:17 – 00:33:56:02
Unknown
it’s a simple stuff for sure.

00:33:56:02 – 00:33:59:06
Unknown
As we kind of wrap up here, Jeff, give me an idea of like

00:33:59:06 – 00:34:01:23
Unknown
what a brand needs to do to kind of think like Wal-Mart again.

00:34:01:23 – 00:34:02:18
Unknown
I think

00:34:02:18 – 00:34:21:05
Unknown
again, according to the Amazon thing, but I think if someone read Amazon’s, you know, core values or leadership principles, I can’t remember the exact phrasing they use for them. You know, they always talked about customer obsession and customer kind of first, right? And if if you kind of take the lens of Amazon’s policies and programs, it does start to make sense when you put them through the lens of those.

00:34:21:05 – 00:34:39:19
Unknown
Is there anything like like, you know, a branch, do they think like Walmart or put their Walmart hat on and maybe they can see it through a different lens? What are some of those core tenets or core values want to call it the Walmart has that really are most important to them that branch should know about.

00:34:39:19 – 00:34:52:09
Unknown
probably one of the first and maybe the biggest ones to be thinking about is, at its core, Wal-Mart really has built its brand on what they would abbreviate to EDI LC EDI LP, and that’s a stands for everyday low cost,

00:34:52:09 – 00:34:53:10
Unknown
everyday, low price.

00:34:53:10 – 00:35:13:02
Unknown
And so they are really wanting all of their suppliers to bring them the best price, which they will in turn pass on to their to their consumer, and that will serve as their best. Marketing is just for for shoppers to really trust that there is not a halo, there’s not, you know, all kinds of jumping around on prices.

00:35:13:08 – 00:35:36:10
Unknown
If we can consistently deliver trust that our price is the best in the market, that will market our business, that will bring people into the stores or to our website. I you know, I think that is a core tenet for Wal Mart. To your point. And the question with some of these entrepreneurial endeavors illuminate and some of the other initiatives that we’ve talked about today, it certainly affects the cost model to suppliers.

00:35:36:10 – 00:35:58:22
Unknown
And so that creates a more complicated, maybe nuanced conversation there where, you know, suppliers that we talk with all the time are saying, hey, we appreciate, we want to be partnering with you to give you the best cost. But, you know, it’s every 6 to 12 months. There’s something else that’s adding 1 to 3% to my cost. You know, at some point, this really doesn’t look like a clean panel, as we expected from Wal Mart for decades.

00:35:58:23 – 00:36:13:20
Unknown
It starts to look like a much more complicated, you know, again, involved sort of cost model. And so thinking Wal-Mart, that is a core tenet. And at the same time, it’s going through a little bit of a journey right now. I think suppliers are going to have to be sort of sharper about how that plays out.

00:36:13:20 – 00:36:41:23
Unknown
For sure. I think also one of the great reads is it just business reads in general is as Sam Walton’s autobiography is fascinating for a number of, you know, a number of amazing success stories, obviously, but also, I mean, he’s been gone for quite some time now. But I mean, it’s it just gives you and I even reading that, you know, in the last I read that in the last five years or so, it really puts you in the shoes of of Walmart’s philosophies.

00:36:41:23 – 00:36:54:18
Unknown
Right. Of of, you know, providing value to the customer and having it price be that leading that leading indicator kind of thing. So yeah that’s a that’s a great, great read. No one’s read that one. What is it?

00:36:54:18 – 00:37:01:03
Unknown
Made in America. Yeah.

00:37:01:03 – 00:37:09:04
Unknown
So Jeff, what are some other resources that maybe brands could utilize a book being one Maybe. But like

00:37:09:04 – 00:37:16:15
Unknown
some resources maybe you guys have or there’s maybe industry type resources that you recommend the help stay top of, particularly Walmart.

00:37:16:15 – 00:37:36:09
Unknown
Yeah. I mean, we we do provide a lot of resources on our website. It’s right at the top, but it’s small e-commerce resources at the top of the page. There a lot of a lot of just free good content. We’ve got a blog with new content all the time, covering a lot of the topics we’ve talked about and in greater depth and sort of detail.

00:37:36:09 – 00:37:37:22
Unknown
We have a podcast there

00:37:37:22 – 00:37:41:19
Unknown
where we’re talking about in new initiatives, best practices with suppliers,

00:37:41:19 – 00:37:53:22
Unknown
and then downloads with a calendar. Wal-Mart runs on a fiscal year that begins in February and then the number of weeks accordingly. And then there’s other dates, you know, when are the warehouses closed and just other particular dates that suppliers need to know.

00:37:54:04 – 00:38:11:10
Unknown
So we have a download of a calendar that is specifically about Wal-Mart’s calendar weeks and dates. Glossary of all and like you said, the alphabet soup, all of those acronyms. So we have a glossary that covers all of those just for suppliers. And now just to give you a couple of examples, but yeah, all out there for suppliers who are curious.

00:38:11:10 – 00:38:13:03
Unknown
it’s good to have that kind of stuff out there, and.

00:38:13:03 – 00:38:17:15
Unknown
for people to check out. So where else can people find you? Jeff, obviously you mentioned the website, but,

00:38:17:15 – 00:38:18:13
Unknown
what can people find? You?

00:38:18:13 – 00:38:39:16
Unknown
you know, live here in Bentonville and love being a part of the community in the town. Our company website is eighth and Walton Dotcom, and that’s what the number 8th and Walton. That’s the intersection where the Home Office has been for many years. Kind of the it will become an Easter egg as Wal-Mart continues to build out a new campus and corporate headquarters.

00:38:39:16 – 00:38:55:13
Unknown
But we’re going to keep the name because it’s it’s very well established in this new space, like you said. So yeah. And then get out to a lot of the trade shows for all the different categories of the stores. So if anybody wants to catch up at one of those in the next 6 to 12 months, I’ll be doing a lot of traveling

00:38:55:13 – 00:38:58:07
Unknown
Jeff Klapper, if you want to look me up on LinkedIn.

00:38:58:07 – 00:39:00:15
Unknown
Awesome. Well, thanks Jeff. A wealth of

00:39:01:09 – 00:39:09:20
Unknown
Walmart and you know I’m sure what some point is as everyone rolls out new initiatives we want to have you back at some point but thank you so much for all the information.

00:39:09:20 – 00:39:11:09
Unknown
glad to do it. Always great to

00:39:11:09 – 00:39:12:23
Unknown
always great to visit with you and thank you.