Walmart+ Presents Opportunity for Brands Seeking New Growth
Walmart has been signaling their intent to launch a competitive offering to Amazon’s prime service; however the shock associated with the COVID-19 pandemic caused the retailer to delay the launch. With a better understanding of the impact from this pandemic, the case for raising the bar against rivals such as Amazon has only sharpened. Last month, an article on Recode indicated that the retail giant was set to launch their new membership service Walmart+ in late July. While the service didn’t go live in July, we expect it to soon.
With more than 5,000 locations nationwide, it’s estimated that 90% of Americans live within 10 miles of a Walmart store. Walmart has invested billions in their eCommerce strategy and plans to integrate their massive store footprint as a competitive advantage. Converting stores into mini fulfillment centers offers a more cost-effective and sustainable hyper local strategy than current rivals including Amazon. As consumer behavior shifts towards favoring convenience over price, Walmart is poised to expand their customer base to more affluent consumers.
What is Walmart+?
While Walmart has not published all details, elements of the program have been released. The Walmart+ membership program will cost $98/year and is expected to be available in all major metropolitan areas. Members will receive free same day shipping, access to discounted 2-hour delivery and other member benefits such as fuel perks and early access to promotional offers. Members will be able to reserve delivery slots that fit their schedule as well as access to the Scan & Go service offering a frictionless in-store checkout process.
What Suppliers Can Do to Get Ready
Walmart will need to continue aggressively expanding their community of suppliers to offer a broad assortment of items. Ultimately, success is having consumers start their product search on Walmart, find exactly the product they’re searching for and have their order(s) fulfilled exactly how the they want.
This launch offers suppliers an opportunity to expand sales with the world’s largest retailer, who’s committed to delivering on consumer expectations in today’s digital economy. For suppliers who’ve seen wholesale channels impacted by COVID-19 or other factors, Walmart+ offers a new demand channel to offset lost sales. Brands experienced with selling on other marketplaces can leverage their competencies to build additional brand exposure on Walmart+.
Walmart has a long history of operating a highly efficient supply chain that’s built long-term cost advantages supporting their business model and brand promise. To deliver on their everyday low-cost leader model, the company depends on suppliers to consistently deliver at high levels. Walmart requires that their suppliers meet very specific vendor guidelines, on-time in-full performance levels and vendor compliance requirements. Vendor compliance requirements include packaging, labeling, routing, EDI and so on.
Requirements vary based on which fulfillment methods a supplier supports, such as replenishing to distribution centers, direct-to-store, dropship vendor and marketplace merchants. As an example, a dropship vendor has to supply daily inventory feeds to keep their product available on Walmart’s online store, while Walmart marketplace merchants must publish rich product content to list their products.
If your organization is not already supplying Walmart, or if you’re considering becoming a Walmart marketplace merchant, here are a few recommendations of steps your business can take to succeed.
Integrate Your EDI
Walmart requires all their suppliers to use electronic data interchange software to orchestrate all ordering, routing, fulfillment, invoicing and so on. If you’re unfamiliar with EDI, it’s a digital method used to connect and transfer business documents between organizations up and down the supply chain and it’s accelerating in use by the retail industry. There are simple cloud-based solutions that quickly offer compliance with Walmart’s requirements yet fall short of delivering the full benefits and automation of EDI. As your organization achieves success selling across the various Walmart channels, integrating and automating business process via EDI is a necessity.
Integrating your EDI solution with your ERP and other demand and supply channels improves business productivity and empowers your business to deliver at a higher level for your strategic partners. For example, by integrating EDI order data directly with your ERP, you can eliminate the need for time-consuming and error-prone manual data entry across multiple systems.
As retailers like Walmart place more pressure on suppliers to meet more aggressive delivery SLAs (service-level-agreements), reducing order cycle times is critical. Choosing a cloud option provides your company with a nimble platform that ties up less capital to get core capabilities in place. Secondarily, cloud solutions offer the flexibility to quickly scale to process large volumes of orders, which is especially important during spikes of direct-to-consumer orders fulfilled on behalf of Walmart and other retailers.
List your products on the Walmart marketplace
As Walmart continues to build their endless aisle with Walmart+, they offer an opportunity for suppliers to create new growth. Walmart.com has over 100 million visitors each month and their US eCommerce business grew 74% amid the recent COVID pandemic. By expanding your available assortment (for existing suppliers), your brand will be positioned to grow sales as Walmart continues to invest in their eCommerce strategy.
Listing your products entails signing up and receiving approval from Walmart. Once approved, your business will need to list your products, establish pricing and manage and fulfill orders that originate on Walmart. Walmart offers a simple merchant portal to manage orders however higher-performing brands will need to fully integrate these time-sensitive interactions.
Meeting Walmart’s requirements and fulfilling at a high level is critical for long-term success. With this in mind, you should evaluate if your current EDI provider can help you add Walmart marketplace as another channel that’s fully integrated with your business system(s). Then, confirm that your solution can meet the unique requirements from channels like Walmart including publishing inventory data and product content from your business system. Leveraging existing infrastructure already implemented for your business can dramatically reduce the time to onboard new channel opportunities like Walmart marketplace.
Optimize Your Product Content
In today’s market environment, organizing and optimizing your product content is an essential element of building your brand and growing sales in digital commerce channels like Walmart. Your product listing means the difference between your product being discovered by a consumer and winning the buy box. Optimizing both your listing and promotional strategy is the digital equivalent of endcap displays in a store footprint.
Customer experience also plays a huge role in protecting customer loyalty and generating repeat customers. Incorrect or incomplete product data impacts the customer experience and negatively impacts both the brand and the retailer. After stock-outs, the most frustrating customer experience is buying a product online and receiving something different than what you expected at your door. This usually happens as a result of outdated product information on an eCommerce or retail website.
Since many Walmart+ members will be purchasing products for pickup or delivery, it’s imperative that Walmart has the right product content available for customers, from pricing, to inventory availability, to item specifications.
For brands with large product assortments, it can be difficult to manually assemble and maintain this information, especially across a wide range of channel partners. Product Information Management systems can make this process easier by creating a central repository for all your product content. By connecting disparate partners and platforms to this repository, you’ll be able to update product data in one place, and then syndicate it across your sales channels.
Fulfillment as a Differentiator
As your business achieves growth in digital channels requiring rapid fulfillment, you’ll likely find that meeting those challenges can be exorbitantly difficult and costly. Market expectations to consistently fulfill at high velocities are the realities of today’s market. As a multi-channel brand, your organization should seek to build sustainable and scalable fulfillment capabilities. Through investment in better equipment, systems, integration, competencies— or frankly, if it’s not your expertise, partnerships with 3rd party logistics companies, you can close that gap quickly for your business.
To keep up with an increase in parcel shipments without sacrificing fulfillment accuracy, suppliers can take advantage of advanced fulfillment solutions like TrueCommerce Pack & Ship. These multi-carrier shipping software options can help with every part of the fulfillment process from printing whole batches of labels in seconds, to automating standard packing workflows, to verifying shipment contents before sending. Fulfillment solutions can help you find the most cost-effective carrier and class of service via dynamic rate shopping functionality that factors in time-in-transit against the selected delivery window. Lastly, automated and integrated fulfillment removes manual efforts such as logging into a myriad of portals to produce retailer-specific ASN’s, labels, pack slips, and so on just for a single unit order.
While we can’t forecast the level of success Walmart will have with the Walmart+ subscription service, this does signal that the long-term winners in retail are investing significantly to adapt to a rapidly changing, digitally driven marketplace. For brands attempting to set themselves apart from rivals, there is a similar challenge and opportunity in today’s market.
It’s important to ensure that your business is prepared to serve the supply chain of tomorrow. That includes serving a much more diverse set of channels, collaborating and sharing additional information with your channel partners and fulfilling at a much higher level of velocity. From an operations vantage point, building sustainable and scalable business process, selecting the right partners to help you, leveraging nimble systems integrated with your supply chain and focusing on delivery at high levels across your channels are critical success factors to thriving in today’s environment.
If you want to learn more about how TrueCommerce can help your business succeed with Walmart and other retailers, reach out to us today. Our specialists will listen to your business’s unique needs, and help you find the best solutions to achieve success.
About the Author: Mike Gross leads the operations teams responsible for TrueCommerce’s customer experience including global product strategy, development, professional services and managed services. Mike has held various leadership positions with leading supply chain execution solution providers helping drive growth and innovation within those organizations. Mike was recently recognized as a Pro to Know by Supply and Demand Chain Executive.