A recent survey of more than 300 Wal-Mart Stores Inc. suppliers suggests a need to rethink their year-to-year strategies to help them, and the retailer, grow business.
The survey, conducted by 8th & Walton of Bentonville and The Harvest Group of Rogers, questioned 334 individual suppliers in 38 states and eight countries about their expectations for their business with Wal-Mart. As of Monday, results of the report had not been shared directly with the retailer.
Information was gathered in March and analyzed in April, said 8th & Walton Chief Executive Officer Jeff Clapper. His company educates suppliers about how to do business with Wal-Mart. The Harvest Group is a sales-and-marketing firm that assists suppliers that do business with Wal-Mart and Sam's Club.
"In general, suppliers expected a lot of aggressive growth in their business [with Wal-Mart] in 2014, but they were employing or intending to employ the same tactics that they used last year, when growth was pretty flat," Clapper said.
About half of the suppliers reached their sales goals with Wal-Mart in 2013, the survey said.
For 2014, 46 percent of suppliers said they expect growth of 5 percent to 14 percent; 16 percent of suppliers expect more significant growth, upward of 15 percent; and 5 percent said they expect to see a sales decline at Wal-Mart. Forty-four percent of respondents cited in-store execution and a slim staff in stores as Wal-Mart's biggest barriers.
Smart suppliers will inject innovation to make more sales and existing items more productive, which is what Wal-Mart wants, said James Farmer, senior director at The Harvest Group.
Farmer also said some in the supplier community underestimate Wal-Mart's commitment to increasing online sales, despite strong indicators such as Wal-Mart's technology company acquisitions and the opening of a corporate office for technology in San Bruno, Calif.
"This is a key strategic initiative from the top down," he said.
Not every item sold in stores is available online, and even some larger suppliers are working on getting their entire cache of goods onto walmart.com.
The survey also examined whether vendors deemed it important to have an office near the retailer's global headquarters. As of now, 67 percent of those doing business with Wal-Mart do not have an office with a permanent staff in Northwest Arkansas. Those respondents with local offices have had a presence in Northwest Arkansas prior to 2005.
Respondents were hand-picked. Most of those surveyed held senior positions within their supplier companies; roughly one-third held the title of vice president of sales.
Business on 06/03/2014