World’s Largest Retailer Speaks Candidly to Suppliers

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Supply Chain Digest reporter Derek Ridenoure recently chatted with Wal-Mart supply chain executives Zach Simpson and Darren Robbins about what they see as the biggest challenges in finding vendors to meet their ever-growing needs. According to the duo, vendors are focused on the wrong things when they make product pitches to giant retailers such as Wal-Mart. Buyers are having trouble finding vendors which can offer products with real value.

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What is Wal-Mart looking for when a vendor touts a new product? Contrary to what most vendors think, the chain is not looking for more products to market to a national customer base. Instead, they are seeking for more products to promote to their regional and local markets to add value to the existing base of customer offerings. This would include products for stores that operate in largely Hispanic or other minority sectors, according to Simpson and Robbins.

When a vendor presents a new feature for consideration, they are often focused only on how many units the product is expected to sell in a given time period. What Wal-Mart is really looking for is numbers on how many more units can be sold than would be sold without the addition of the new product feature. They feel that this is the way to help both the buyer and the end customer.

The duo also points to an overall lack of collaboration among vendors. They believe that with better communication among the vendors that supply Wal-Mart and other national retailers with products, everyone could end up with better product offerings, including the buyers who want a variety of excellent merchandise to sell, and customers who seek a better quality of selection among the products they can buy.

Vendors should focus their efforts on offering products with features that can sell more than that sector of merchandise would sell if this particular feature wasn’t offered at all. [/show_to]

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