'Business as Usual' at Walmart?

Despite widespread concerns that Walmart is cutting back on in-store displays, collaborative merchandising activity is alive and well at the mass merchant.The retailer has been expanding its exclusive product assortment through partnerships with premium brand manufacturers, and this year gave extensive merchandising support to two such high-profile launches from Henkel Corp.Walmart in January became the exclusive U.S. retailer of an Ultime line of hair care products from Henkel’s Schwarzkopf. Created in partnership with supermodel Claudia Schiffer, the 72-item line includes care, styling and color products priced between $6.97 and $9.97. The collection launched in Europe in 2014.The products are merchandised in-line, securing a brand block identified with a black header and aisle violators. At launch, the items also earned a dedicated endcap display outfitted with a product video.Co-op advertising support included 15-second regional and national TV spots, print ads in magazines including Conde Nast’s Glamour and Hearst Communications’ Cosmopolitan, FSIs in Sunday newspapers, display ads on websites including walmart.com and popsugar.com, as well as five- and 15-second video ads on websites such as hulu.com.In March, Walmart exclusively launched Henkel’s Persil ProClean, a line of premium laundry detergents available in liquid, powder and unit-dose forms and boasting a Pro-Power stain-fighting technology. The Persil brand is widely available in Europe.On store shelves, the detergent is sandwiched between category leader Procter & Gamble’s Tide and lower-priced sister-brand Gain. Persil, priced comparably to Tide, is prominently spotlighted with in-line signage. The new product also gets secondary placement on a dedicated endcap outfitted with side panels and an interactive video delivering details on the product's various formulations. It earned yet another shopper touch point via sampling stations.Co-op support for the detergent includes regional and national 30-second TV spots, print ads running in Time Inc.’s All You, display ads on the retailer’s website, and an April 11 email blast from the retailer.A dedicated website for the line touts its availability at Walmart. At launch, site visitors could enter a sweepstakes awarding one grand-prize winner with six vouchers for free bottles of the product and a “premium night on the town” comprising a $300 Nordstrom.com gift card, $200 OpenTable.com gift card, and a $150 Uber.com gift credit. One runner up also got six vouchers. Entry ran March 13 through April 12.The Wall Street Journal characterized the Persil launch as a way to pressure P&G to lower prices on Tide. The manufacturer’s dominant position in the category helps insulate it from pressure to cut prices or take other steps that might give Walmart a bigger edge over competitors; the story noted P&G had effectively raised prices for some Tide varieties last year by reducing the amount of detergent per container.The retailer has been refocusing on lower prices and asking suppliers to provide the lowest costs possible — even at the expense of joint marketing programs — a move Walmart U.S. president and chief executive officer Greg Foran characterized as “business as usual” during an April analyst meeting. It has raised some concern among P-O-P vendors and the industry is watching Walmart closely. As one provider told the Institute, “the pendulum swings again.”Foran said reducing the number of displays is a way to give store managers more assortment and merchandising authority to ensure localization and ownership, with the overall goal of greatly improving the store experience throughout 2015.“We’ve had too many PDQs, or displays, not allowing associates to merchandise the store — their store — the way they need to for their customer,” Foran said. “We’ve got too much inventory in the back rooms, and our processes are not where we want them to be. And that is causing some undue shrinkage and some out-of-stocks.”In addition to the shopper experience and price leadership, Foran listed assortment and access as Walmart’s other two areas of focus. He said the retailer is improving its use of data to help build a customer-relevant assortment, especially in terms of fresh, private label and omnichannel.To improve access and convenience the retailer is expanding its grocery home shopping test and better leveraging in-store pickup, as well as fine tuning its store format strategy and next-generation supply chain.“There are opportunities for us to significantly update and improve things like space allocations, adjacencies, ambience, navigation and flow in both our formats [Supercenter and Neighborhood Market]. We are working on this now as we are also on the next generation of our supply chain, one that leverages moving pallets with each as one unit and looks at inventory across the entire enterprise,” Foran said.

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