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Walmart Suppliers Feeling the Pinch?

feeling the pinch

Walmart’s decision to raise its base pay for associates has pushed a number of other major companies, including McDonald’s, to do the same. As the labor market tightens, making jobs appealing for workers makes good business sense. Some observers speculate that the trend toward raising wages might also be an attempt to stave off changes in the minimum wage law: $10 an hour, the planned base wage at Walmart beginning in 2016, is more comfortable than $15 an hour, the wage that would keep a full time worker from being eligible for government benefits like food assistance.

At the same time, Walmart is also emphasizing EDLC and EDLP with suppliers. A number of news outlets have reported that Walmart is asking suppliers to take the money they’ve been spending on promotions and shopper marketing, and to put that money into reducing costs so that Walmart can reduce prices.

Reactions to the news range from relief at getting back to the Walmart roots, to fear that suppliers will lose their ability to tell their stories as they want to — or to compete with other brands in their category, not to mention Walmart’s store brands.

But Walmart is asking suppliers to cut back on joint advertising with Walmart — in-store promotions, Walmart.com marketing, and the like — not demanding an end to supplier marketing efforts. Walmart will cut costs in this way, and it provides a context for the retailer’s demand for even lower prices from suppliers.

For suppliers, the solution may be to rethink marketing with a view toward ROI. Better tracking and a firm grasp of the numbers can help ensure the best possible return from marketing dollars. Mastering Retail Link fully is a step in the right direction.

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RetailHer

retail-her

Loria Oliver of OWC PR, a boutique public relations company, is the hostess of RetailHer, a segment on 8th & Walton’s Saturday Morning Meeting for Suppliers. Women continue to be the most important consumer segment for CPG goods, but they have historically been underrepresented in the upper echelons of retailing and among the decision makers in the space. Loria has been getting to know some of the movers and shakers among women in retailing on RetailHer.

While sharing the kind of insights and experiences suppliers will find helpful in their businesses, Loria also makes a personal connection with her guests. We’ve enjoyed seeing pictures of the RetailHer guests as young women, hearing the advice they would give their younger selves if they could, and learning about the challenges and opportunities these impressive women have experienced during their lives in retail.

Here’s a look back at a few of the episodes.

The first RetailHer segment introduced Mary Zettle of General Mills:

A December segment shared personal and professional wisdom from Alison Gutterman of Jelmar:

The most recent episode featured 8th & Walton’s own Katia Colston:

Don’t miss future episodes of RetailHer. 8th & Walton’s Saturday Morning Meeting for Suppliers is on NBC-KNWA at 6:30 p.m. on Saturdays, and of course you can watch it here at 8thandWalton.com or on YouTube at any time.

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Rapid Prototyping Boosts Packaging Options

3D collection of beauty products isolated on white background

Product packaging spreads across the entire supply chain as few other aspects of your product do. You begin with your brand concept and the need to convey it under challenging circumstances: on a three dimensional object, on a shelf full of other products, as customers move past it. From marketing concepts the packaging has to be transformed into a package that can hold your product… and meet legal obligations for labeling, and be as sustainable as possible from the factory to the landfill or recycling center.

The final design has to become an object, and that means printing as well as packaging. Products and packaging together must work with the desired shipping method, protect the product and get it to the store with no loss of visual appeal or freshness, be visible in warehousing and distribution centers to ease on-shelf availability issues, and must also meet the needs of retailers in the available display space.

On the shelf, you find out for sure whether the design does what marketing hoped it would. The proof of the pudding is in the eating, but the proof of the package is in the shopping.

Once the package gets into the shopper’s cart, it has to serve even more purposes. It needs to reinforce the positive feelings that got it into that cart, and do its part to get the shopper back into the store to buy more of your product. All this must of course be done cost-effectively and fast.

Your package obviously has to be more than just a pretty face.

Here’s where Rapid Prototypes makes a difference. A local family owned business since 2003, Rapid Prototypes is now introducing Northwest Arkansas to the Rho P10 HS Series by Durst. This is a digital printer that can print on the widest range of ridged and roll media without compromising on quality, speed or efficiency.

The Rho P10 HS Series by Durst produces topnotch print quality without loss of speed. It has twice the number of nozzles as the typical digital printer, doubling the speed.  Its high level of flexibility allows it to print on the widest possible range of media:

  • corrugate
  • foam board
  • metal
  • acrylics
  • PVC
  • clear film and other backlit material
  • textiles
  • vinyls

In short, the new technology will allow Rapid Prototypes to reduce the gap between how you and your designers dreamed your packaging and displays would work and look, and the reality.

More than even, Rapid Prototypes can provide quick, short run, and even emergency services along with an extended range of printing, packaging, and display services.

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WordPress for Suppliers?

SMM4S

Collin Condray of Blue Zoo Creative talked about WordPress websites with Jeff Amerine on Saturday Morning Meeting for Suppliers.

WordPress is a content management system which currently powers nearly one quarter of all the websites on the internet, including Dole, Glad, Method Products, and many more iconic brands. “It’s got a very large support community,” Condray points out, “so there’s thousands of people developing for the platform.”

This means that hiring someone to keep a WordPress site up to date or finding support for it is easier than for platforms like Drupal.  As 8th & Walton’s CEO Jeff Clapper points out, “I can probably hire a receptionist or an intern with WordPress skills.”

So just what is a content management system (CMS)? It’s a software platform that lets you get into the back of your website and make changes or additions. Each WordPress website will be different, but the admin area is generally a sort of form users can fill in using just English, no special computer languages.

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Condray, a former Tyson team member, says, “One reason that we did pick WordPress is because we think it’s easy for people who use WordPress to go in and make changes to almost all the parts of the site. And we typically include training when we set that up so you’re not lost.”

Blue Zoo includes training and video references when they build a website, “So,” Condray says, “you’re not reliant on us. You can concentrate on the content that you’re putting together and then we can concentrate on things like making your site run better or adding new features or improving the design.”

Watch the whole episode:

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Six Social Media Mistakes Suppliers Make

SMM4S

Social media is no longer optional for CPG brands, but it’s still uncharted territory for many suppliers. On the most recent episode of Saturday Morning Meeting for Suppliers, Rosie Haden and Rebecca Haden of Haden Interactive pointed out six social media mistakes suppliers often make:

  • Thinking social media strategy is one size fits all. In fact, while there are generally successful tactics and best practices, the right social media strategy will be different for each brand. Read our free ebook on social media for more detail.
  • Thinking you can control the conversation. “The problem with trying to control the conversation is that brands never have been able to control the conversation,” Haden pointed out. “Social media just gives you the illusion that you can.” Social media gives you an opportunity to join the conversation, which you can’t do when people are chatting about your brand in their homes.
  • Responding badly to negative comments. Suppliers may back off from social media in these cases, or come back with a defensive response. Either one can make them look bad, where a positive, compassionate response can actually make the brand look better.
  • Failing to track results and use that data. Tracking social media is much easier than tracking broadcast media, but often suppliers fail to decide how to track social media efforts before they put a campaign in motion. That makes it hard to tell what efforts worked best and how future resources should be allocated.
  • Thinking your strategy can be “set it and forget it.” Social media changes quickly.  Suppliers can improve their results by responding to changes in the audience or to new insights from the data collected.
  • Failing to understand the path to purchase. Rosie Haden acknowledged that suppliers might like to have shoppers read a tweet and rush right out and buy a case of the product, but that isn’t typical. It’s much more common to build relationships and inform consumers on social media, bring them back to your brand website, and make the sale there or in the store.

Are you making these errors? Walmart has made a strong investment in social media, and suppliers should follow their example. Watch the whole episode:

We’ll be going into more detail on other segments this week, too.

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Fight Hunger. Spark Change

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Fighting hunger is one of the issues to which Walmart is most committed. The “Fight Hunger. Spark Change” initiative was launched in September 2014 with $3.7 million in grants to support local food banks and support from six major Walmart suppliers (General Mills, Unilever, Hormel, ConAgra Foods, PepsiCo/Quaker and Kellogg Company), plus a desire to encourage consumers to donate.

Perhaps encouraged by the tremendous response to their American Idol-like “Get on the Shelf” contest, Walmart gave consumers a chance to vote for their local food banks and direct the donations toward those banks.

Now through May 3rd, Walmart is giving the initiative a boost. Here are the components:

  • Purchases of specific items trigger donations to food banks, as has been the case since September. Items include Family Size Cheerios and a 5 pack of Kraft Macaroni and Cheese — larger sizes of popular staples. Each purchase send ten cents to food banks.
  • Consumers are encouraged to post photos with the hashtag #WeSparkChange at Instagram, Facebook, and Twitter in support of the program, and to show that they have taken part.
  • Customers are also encouraged to donate to food banks when they check out at Walmart stores. Through May 3rd, Walmart will accept the donations as part of the regular check out process, making it easy for customers to make their donations.

This is clearly an omnichannel effort. The social media component’s full concept is the #WeSparkChange Challenge, in which people gather six friends in a photo to remind viewers of the 1 in 6 Americans facing food insecurity. Ideally, all six of the people will have bought participating items at Walmart. For each public post of this kind with the hashtag #WeSparkChange, Walmart will donate $10, up to a maximum donation of $1.5 million, to Feeding America, whose member food banks are the recipients of the donations from Fight Hunger. Spark Change.

Participants are also encouraged to challenge someone else when they post their photos. By challenging friends and family to get their own photo together within 48 hours, consumers spread the word and potentially drive traffic to the stores.

Walmart’s total goal is $3,000,000, so they are hoping that the public and the participating suppliers will match their contribution.  This amount would provide 75,000,000 meals at food banks.

Suppliers have put efforts into promoting the spring campaign, too. At the General Mills blog, for example, you can read about the long-term relationship between General Mills and Feeding America, and see this video featuring Reba McEntire:

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Do You Really Appreciate Retail Link?

Retail Link

Marketing giant Multichannel Merchant recently wrote about the value of sharing retail data with vendors. Retail Link, naturally, was their aspirational example, though they acknowledged that smaller retailers won’t have the IT budget to replicate that robust experience.

Nonetheless, they told their readers that it would make sense to invest in a vendor dashboard that allows suppliers to access their sales data at will.

Here’s their list of great reasons for retailers to share sales data fully with vendors:

  • Save the personnel costs of having retailer or buyer teams run ad hoc reports for vendors.
  • Combine the costs of retailer’s data visualization software with that of the vendors.
  • Reduce slow-moving inventory by encouraging vendors to make changes that will help solve the problem when it becomes visible to them.
  • Reduce out of stocks by bringing vendors’ attention to the issue and sharing responsibility with them.

These are benefits for the retailers, but they can also benefit the vendors, and that’s where Multichannel Merchant comes up with their great idea for how a smaller retailer can fund the specialized software: charge fees for the use of the data sharing tools.

“Point-of-sale data is the lifeblood of any product vendor’s business,” the author points out, “and making effective use of this information is a key success factor for winning at retail.”

Suppliers will value the information, especially since it will allow them to determine the value of shopper marketing promotions. This kind of data sharing, the author concludes, can even get vendors to engage with retailers in Joint Business Planning and encourage a sense of partnership. They reckon this is worth paying for.

Retail Link is free. And yet many suppliers don’t get the most out of it. An investment in training will make a difference, at a lower cost than software fees would come to. Choose the right course for you from 8th & Walton’s wide range of classes.

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Ebooks for Supplier Development

8th & Walton is an important source of support and of information for suppliers. With each of our Saturday Morning Meeting for Suppliers special programs, we produce an ebook designed to help you take the various exciting ideas and distill them into a strategic plan that will work for you.

Just share your contact information and download any or all of our ebooks for free!

omni-book

Omnichannel shoppers provide new ways to connect and new ways to present your product. Don’t be left out. Omnichannel: The Always On Shopper gives you a step by step process for marketing on all the channels at once.

bigshow-ebook

Relive the National Retail Foundation’s Big Show and get a handle on the future of retail with Retail’s Big Show 2015.

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Shopper Marketing has become an important discipline and a tremendously helpful tool.

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Social Media offers chances to engage with customers and prospective customers in powerful ways.

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On Shelf Availability continues to be one of the major challenges suppliers face. Fortunately, there are plenty of actions suppliers can take — you’re not helpless.

 

 

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Do You Want to Be at Walmart.com?

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Recent news has suggested that UFC fighter Ronda Rousey is being mistreated by Walmart because her book, like many other items, is available through Walmart.com rather than on the physical shelves of physical stores.

“I’m shocked, shocked,” her publisher was quoted as saying, “to discover that censorship is going on in America!”

Would she be equally shocked to discover that Amazon is selling the book online? Would she think of it as censorship? Apparently not.

But suppliers also often still think of Walmart.com as second best to the physical stores, even though Walmart has in the past couple of years focused strongly on their online business.

Is Walmart.com less than Walmart?

Certainly, Walmart makes more sales in the physical world than online. And it has been true in the past that starting out with Walmart.com has been a sandbox situation for testing product appeal, just as starting out in a local store often is.

But Walmart is not treating Walmart.com like a redheaded stepchild. Walmart.com is getting plenty of attention from Walmart, and the focus is on bringing Walmart stores and Walmart.com together. What’s more, Walmart.com is beginning to nip Amazon.com’s heels.

A recent report by Millward Brown Digital shows that 2% of Walmart.com shoppers were Amazon Prime members in 2013, while 8% were in 2014. Amazon Prime is a premium membership available to shoppers, offering free streaming movies and music, free 2-day shipping, and similar perks. While Forbes sees this as merely as evidence that the number of Prime members is growing (and they are — 40,000,000 is the current estimate), the study also found that Prime shoppers are the least likely to shop at other online retailers besides Amazon. If Walmart.com can appeal to the most loyal of Amazon’s loyal shoppers, it’s a sign that Walmart.com is pulling ahead.

Alexa’s estimates say that more than 7% of Walmart.com’s traffic is downstream from Amazon — that is, they have just visited Amazon before coming to Walmart.com. Walmart.com is the 38th most popular website in the U.S. (Amazon is #4), and one of the most popular in the world.

What’s more, Walmart offers shop online/ pick up at a physical store service. Using stores as a distribution center gives Walmart the edge for flexibility. Rousey’s publisher misunderstands this system, thinking it’s like keeping distasteful products behind the counter. In fact, it’s a way of leveraging Walmart’s enormous network to give online shoppers instant gratification.

This is the perfect time to get your goods on the virtual shelves at Walmart.com. Our course, How to Sell to Walmart.com, gives you the inside information you need.

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Walmart Suppliers Solution Summit

The Walmart Supplier Solutions Summit at the Crossmark Center for Collaboration brought together companies that provide solutions for suppliers and Walmart suppliers looking for solutions.

In one room, suppliers found more than a dozen companies whose only goal is to make life better for companies like theirs. The third-party suppliers presented their services in simulated buyer and supplier situations, including Joint Business Planning settings.

Some of the companies present:

  • Prysm makes huge video walls. Sometimes mobile is just right, but sometimes you want customers to feel like they’re in a world-class aquarium with data instead of Great White sharks, and Prysm can do that.
  • Field Agent brings the power of crowdsourcing to marketing research. Whereas companies in the past had to rely on small samples and high costs in the form of focus groups and mystery shoppers, Field Agent now brings smart phone users into the mix as researchers. Now you can get more data faster, cheaper, and better.
  • In Context Solutions provides virtual shopping experiences in 360 store simulations. You can try out new ideas and see how they would work in real life. You can use videos of these simulations to show the experiences with greater clarity that you can expect from a Power Point, too.
  • Alteryx shared software that can integrate data from multiple applications, including Retail Link. Representative Kurt Schaffer explained that Alteryx automates enough data handling that what might take an analyst weeks to prepare can be done in a matter of hours, allowing faster responses to data.
  • 8th & Walton — yes, we were there, too. Watch the video to see what’s new with us.

In fact, enjoy the video to find out more about the companies and their technology. It was a great summit!

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