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Walmart’s Four Point Plan to Win in the US


Speaking at the annual Raymond James Investors’ Conference, Steve Bratspies, who was appointed as US chief merchandising officer last October, detailed the four point plan which is underpinning the retailer’s improved sales trends and future strategic direction. The retailer has delivered six successive quarters of positive comparable sales growth, and is already making significant progress against many of these key initiatives.


1. Developing winning stores


The retailer is creating a new vision for its Supercenters and Neighborhood Markets, with a focus on creating a more compelling experience for its shoppers. In addition to improvements to store design, including the look and feel, the retailer has also made significant investments in people and technology to support this.


2. Delivering value


Walmart will continue to invest in pricing as it aims to use its low price heritage as a key differentiator in the market. To support this it is working with its suppliers to improve the cost of goods sold, through taking co-op marketing out of the business for example, while also looking at every aspect of the supply chain, including sourcing and logistics, to identify cost saving opportunities.


3. Being great merchants


At the heart of this, Walmart is focused on running great stores with great products. To achieve this, it’s looking to drive improvements in three areas:


Customer advocacy – Walmart is placing its customers at the heart of everything it does. This includes having an intense focus on fresh as this sets the tone for the overall shopping experience. Changes include an improved assortment, better quality and the improved presentation of products, including introducing a new ‘wet wall’ in produce and its ‘Fresh Angle’ program which is seeing new equipment being introduced. Walmart is also investing in private brand to build loyalty and a more engaged relationship with its customers. Winning in this space will require it to drive pricing, innovation and product quality; a new product development and sensory lab will open in the next couple of months to support this.


Cost position – Walmart is focusing on running a strong EDLC model, to take costs out to invest in pricing.


Service to the stores – Walmart’s merchants are tasked with helping its stores to run more efficiently, improving product flow, with aggressive plans in place around fill rates, efficiency at the shelf edge and more customised programs at the local level to drive relevancy.


4. Providing added convenience


With almost 90% of the US population living within 10 miles of a Walmart store, the retailer already has access to almost the entire US population based on its current store network. However, it is aiming to provide more access and convenience in three key ways; its Store Pickup program, online grocery pickup and the Walmart app. Over the last year, grocery pickup has been a particular success, with the retailer planning to roll-out the service to 20 new markets in the US this year, in addition to the 20 markets in which it is already present. Walmart Pay will also be rolled-out nationally helping the retailer to bring to life a seamless experience between the physical and digital.


Source: http://retailanalysis.igd.com/Hub.aspx?id=23&tid=3&nid=15045


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