For a year now I have regularly written about the new "Sustainable Development" strategy that Walmart has implemented since 2005. I have emphasized it even more, since the No. 1 distributor in the world has a major impact on all its suppliers, namely, the national brands – as happens when Walmart imposes a reduction of 5% on the weight of packaging or introduces a Product Sustainability Index (which I will come back to next week).
I followed a second line of reflexion focussing on a recent and major inflection by Walmart: the extension of its own private label collections. We have tracked the Great Value re-launch. One may also wonder about the future of the principal private label, "Sam's Choice", when we see products traditionally signed Sam's Choice progressively migrating to Great Value (thank you MyPrivateLabel for the photos!):
I would like to draw your attention today to the convergence between these two strategic axes, and invite you to watch a video posted online recently by Walmart, "The Secret Life of Sour Cream".
What strikes me in this film is the mutual approach that Walmart has established with its suppliers. Since October 2008 a programme called "Walmart Aspect" was set up with 500 private label suppliers, with a view to re-launching Great Value: this is a "Product Lifecycle Management (PLM)" process set up on the Internet, collaborative in nature, in order to optimize the manufacturing process, to speed up innovation and improve consistency.
Another aspect that struck me is that Walmart's own flagship brand serves as media support to put the sustainable development promise into practice. Great Value becomes spearhead of Walmart's strategy: cheaper products, good quality, and involved in the "sustainable" strategy of the retailer.
Finally, I would bring up a question I ask regularly: what happens to national brands? Remember that private labels now account for 22.5% of the Walmart sales volume (17.6% in value) and some analysts predict that this figure will climb to 40% within 3 years! Remember also that Walmart has rationalized its offer and brought it down from between 10% to 50%, depending on the products ... and saw its sales grow! "The more SKUs we took out, the more business went up", said John Fleming, Exec VP and Chief Merchandising Officer. National brands that are not No. 1, or No. 2, or niche brands, without a distinctive offer, should be concerned.
I followed a second line of reflexion focussing on a recent and major inflection by Walmart: the extension of its own private label collections. We have tracked the Great Value re-launch. One may also wonder about the future of the principal private label, "Sam's Choice", when we see products traditionally signed Sam's Choice progressively migrating to Great Value (thank you MyPrivateLabel for the photos!):
I would like to draw your attention today to the convergence between these two strategic axes, and invite you to watch a video posted online recently by Walmart, "The Secret Life of Sour Cream".
What strikes me in this film is the mutual approach that Walmart has established with its suppliers. Since October 2008 a programme called "Walmart Aspect" was set up with 500 private label suppliers, with a view to re-launching Great Value: this is a "Product Lifecycle Management (PLM)" process set up on the Internet, collaborative in nature, in order to optimize the manufacturing process, to speed up innovation and improve consistency.
Another aspect that struck me is that Walmart's own flagship brand serves as media support to put the sustainable development promise into practice. Great Value becomes spearhead of Walmart's strategy: cheaper products, good quality, and involved in the "sustainable" strategy of the retailer.
Finally, I would bring up a question I ask regularly: what happens to national brands? Remember that private labels now account for 22.5% of the Walmart sales volume (17.6% in value) and some analysts predict that this figure will climb to 40% within 3 years! Remember also that Walmart has rationalized its offer and brought it down from between 10% to 50%, depending on the products ... and saw its sales grow! "The more SKUs we took out, the more business went up", said John Fleming, Exec VP and Chief Merchandising Officer. National brands that are not No. 1, or No. 2, or niche brands, without a distinctive offer, should be concerned.
