By 2025 anyone born between 1980 and 2000 (Millennial generation) will make up 75% of the U.S. workforce and yes, Vendorville.
Millennials will be the most educated generation in history and they will be reinventing the workforce as we know it today. They don’t just love new technology, they live it. What does that mean for Walmart and its suppliers? The game is changing.
A skill set that says “I can pull Retail Link in my sleep” will not be enough for supplier teams in 2025. What should suppliers look for in the next generation of leadership to drive Walmart growth? Statisticians, data visualization experts, e-commerce veterans, and programmers will articulate new business rules in a dynamic retail environment. Suppliers have to be willing to take chances on younger hires that bring these skills to the table in order to truly cut through to the top layers at Walmart.
However, this generation does not have the street smarts of knowing what it takes to push widgets from manufacturing origin through the most complicated and efficient logistical system in the world to ultimately land on the shelves at Walmart. The “doers” on Walmart supplier teams today will need to become mentors to these future “doers” and humble themselves to embrace the new set of skills these go-getters bring to the party.
What may seem like bold predictions are more than an educated guess. Looking back 20 years when our firm hung its first shingle, who could have predicted that 48 vendor teams would ignite a Bentonville Boom of more than 1,200 today?
It seems like yesterday when all a supplier would need to manage its local business was a National Account Manager and a Retail Link Analyst. Back then Retail Link was DOS-based and there was no such thing as email. “Vendors,” as we referred to them, had to run files back and forth on disks to buyers. They had to print out reports every Monday and hand deliver them to Walmart’s Home Office.
Today there are more than 6,000 people working in a 27 mile-radius in Vendorville. The third-party suppliers (vendors to the vendors) make up another 2,000 people.
AN EVOLVING RELATIONSHIP
Since those early days, the vendor relationship with Walmart has evolved across four milestone phases.
• Proximity Relationship (1991 – 1997)
Being close to Walmart gave suppliers a competitive advantage, and competition was fierce to get valuable face time beyond line reviews and joint planning sessions. Bentonville teams enjoyed an environment rich with industry information and contacts. Speed has always mattered, and local vendors could focus on the business at hand and respond to issues quickly and effectively.
• Data Relationship (1998 – 2005)
The spread of Retail Link combined with the use of syndicated data ushered in a new era that allowed suppliers a seat at the head table. A supplier team leading modular development, store training, and vendor-managed inventory initiatives became the norm if a CPG company wanted to be a leader.
• Insight Relationship (2006 – 2011)
Project Impact steered suppliers away from a data-driven relationship and shifted the focus to insights as the new currency of doing business with Walmart. Delivering a two-year forecast was no longer enough. Buyers needed insights to predict category drivers as far as five years out. Post Project Impact, suppliers were welcomed back into the data camp again.
• Digital Relationship (2012 – 2020)
With Amazon’s current rate of growth, 2012 could be the first holiday season in a long time that Walmart does not come out on top. In 2015 Millennials could eclipse Boomers in population and spending frequency. To speak to young consumers, suppliers need to be well-versed in e-commerce and the digital marketplace. Digital cannot be a staple-on strategy. Supplier teams risk becoming dinosaurs if they lean too heavily on their replenishment, insight, and merchandising laurels without including digital as a cornerstone capability.
WINNING WITH DIGITAL
Just “being in Bentonville” is a start, but it has never guaranteed success. Even a strong insights team with heavy reporting muscle does not guarantee anything. Successful suppliers will have to build relationships with current brick and mortar replenishment, Walmart.com, @WalmartLabs, and Merchandising / Marketing in a delicate balance.
For Walmart, winning in retail no longer means investing in the right store locations and becoming a best in class marketer, supply chain optimizer, and merchant. Now, winning will increasingly be decided by the extent to which supplier partners help Walmart and Sam’s Club master new digital points of influence.
While digital is newly evolving and complex, the supplier model of the future is relatively simple: Blend operational excellence that has driven the historical Walmart relationship with digital expertise and insight delivery.
LAST WORD ON TALENT
Teams will be truly global, with Walmart very intentional about go-to-market strategies and capability requirements.
Suppliers will be expected to provide world insights, become more efficient with technology, know the customer even more intricately and interpret complex research data in minutes. Speed on actionable recommendations will become even more critical.
Companies will be putting people in the Team Lead roles that are true General Managers, not sales leaders.
Suppliers will need to take risks and hire talent with different skill sets. These may be younger hires or seasoned dot-com veterans.
Most of us remember the Gunfight at the OK Corral between Walmart and Target.
Two years ago the gun-slinging shifted focus to Walmart vs. Dollar General. Now (and for the next five years at least) Amazon is Public Enemy #1. If supplier teams do not have talent that can speak Amazon and e-commerce, they are in trouble.
Digital knowledge that was typically reserved for supplier marketing teams swooping into Bentonville a few times a year for line reviews must now be present in everyday conversations at multiple levels of the local relationship.
If you needed more evidence, look at Walmart’s next Board of Directors pick: a 36-year old female exec who worked with Google and is now at Yahoo! to help drive corporate growth for the next century.
Sunday May 24, 2015
Become a Contributor!
See a story you think is relevant to Walmart's supplier community? Share it!