How to Compete & Thrive in
a Walmart World
“Picking Walmart’s P.O.C.K.E.T.S”
SESSION #3
KEY ITEM
PROMOTION
Sam Walton’s Secret:
What YOU think about
most of the time . . .
Is what you become!
Sam Walton’s Secret:
I do not choose to be a
common man !!!
Merchant Strategy Question:
“What is the key to Sam
Walton’s strategy for selecting
products and services for
Walmart’s Stores?”
Answer:
“Sam Walton used an
outside-in approach to gather
product ideas.”
Outside / In
1. Study competitors copy BP
2. Ask supplier partners
3. Collect ideas from employees
4. Ideas are free, “steal shamelessly”
Why Outside / In
Innovation
Versus
Imitation
Saturday Morning Meetings
Product Presentations
by the Buyers
Customer
Centered Focus
Every WalMart Employee is
expected to think like a
Retail Merchant
Merchant Mentality via VPI
Volume
Producing
Item
Vendor Partnership
Information Sharing
Trust Based Partnerships
Automated Replenishment
Vendorville
No 3rd Party Brokers
Meetings at WalMart HQ
1000+ Suppliers
3 KINDS OF
WALMART
SUPPLIERS
Walmart’s Buyers Negotiate
on behalf of Customers
No Gift Policy
Demand “The WalMart Price”
Vendors must improve
efficiency
Demand In-Stock Execution
Hurricane
Katrina
“Walmart’s trucks
arrived in New
Orleans days before
the United States
Federal Government!”
Weather Technology
Snow Storms
Hurricanes
Store Wars
“The battle for the
Carts and Minds of
Consumers”
Store Wars Between:
Retailers Horizontally
Walmart & Vendors Vertically
The Weapon - Private Label
Store Wars Between:
Scan Based Trading
“Pay Per Scan”
“One Stop Shopping”
In-Store “Non-emergency Care” Clinics
Pharmacy Design
Optical Center
Hair Salon
Auto Repair
Groceries
General Merchandise
Financial Services
Retail Marketing “5 P’s”
Product
Price
Place
Promotion
People
Retail Marketing
Segmentation Strategy
Hispanic
Asians
Empty Nesters / Baby Boomers
Affluent
Suburban
Rural
Merchandising Execution
The Wheelbarrow
Merchant Ideas For You
 Use an Outside / In approach
 Copy best practices of others
 Allow people to be merchants
 Never forget: The customer is the boss
How to Compete & Thrive in
a Walmart World
“Picking Walmart’s P.O.C.K.E.T.S”
SESSION #3
EXPENSES
Expenses
“How important is expense
control to Walmart’s overall
retailing strategy?”
Sam Walton
Answer:
“The success of Walmart’s
Every Day Low Price (EDLP)
strategy is made possible by
driving costs out at every step
of the supply chain.”
Expenses
“Every time Walmart
spends a dollar foolishly,
it comes out of our
customers' pockets.”
Sam Walton
“Walmart executives,
managers and employees are
cautious when it comes to
spending money!”
“Being cheap is valued at Walmart”
“Walmart’s relentless pursuit
of low prices is as much a
result of controlling
expenses as it is a result of
their buyer’s ability to buy at
low prices.”
“They pass expense savings
along to their customers”
Walmart’s People Greeters
Theft control specialists
Expense Control
Office Supplies & Profit Sharing
Paper usage
Overtime Budget
No Headcount Increases
Relocation
Executive Travel
Technology – Temperature of Stores
The Sam Walton Way
“Expense Control Standards”
“Get employees to manage
expenses like they were
personally writing the check”
Leading Expense Control
“Sam Walton was absolutely
fanatical about controlling
expenses”
Expense Control Lessons
The Walmart Way
As volume rises – expenses go down
Lead by your own example
Focus on the small things
Culturally integrate cost control
Measure, review and reward
Expense Control
Ideas For You
 Lead by your own example
 Asked staff to spend like they were writing the
check
 Offer incentives for meeting expense goals?
Questions
?????????
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www.michaelbergdahl.net
How to Compete & Thrive in
a Walmart World
“Picking Walmart’s P.O.C.K.E.T.S”
SESSION #3
KIP / EXPENSES