This strategic move will help minimise redundancies in its purchasing strategy, streamline it operations, and help it capitalise on its expertise of being able to provide offerings in its product basket for the lowest possible price.
In what is likely to be a milestone for Wal-Mart, sources familiar with the matter at hand have disclosed that for the first time in the company’s history, Wal-Mart will consolidate and combine its own purchase of products with those it sells on its website, as the company moves into gear to take on Amazon.com
As per vendors contacted by Wal-Mart regarding this strategic change, currently Wal-Mart has two independent buying teams – one focuses at its brock and mortar operations while the other focuses on its online buying requirements.
Wal-Mart, the world’s largest retailer, is now moving to consolidate and streamline its buying process so as to make it more efficient, not only for itself but for vendors too. This move will also improve coordination between the two buying teams.
According to vendors, with this streamlining taking place, Wal-Mart is now wanting to apply the expertise it gained, namely that of securing the lowest possible price of a product, in its bricks-and-mortar stores to its e-commerce business.
Vendors preferred to remain anonymous for fear of disrupting ties with the world’s biggest retailer.
The move is part of a larger strategic drive by Wal-Mart CEO Doug McMillon and its e-commerce chief Marc Lore, to significantly reduce the gap with Amazon.com and boost its competitive ratings in the U.S. e-commerce market.
Lore, founder of Jet.com, joined Wal-Mart when it got acquired by the giant. He has now been charged with revitalizing Wal-Mart’s online business and in doing so he has introduced changes, which include free-two day shipping.
Lorenzo Lopez, Wal-Mart’s spokesman told today that Wal-Mart wants to create “a more efficient process that accelerates how we bring the full assortment of products in stores to Walmart.com.”
He went on to add that the company’s buying team is expected to expand the company’s online offerings across segments.
Going forward, under its new system, any item available in its brick and mortar store will also be approved for sale online, said sources.
“The way it operated until now was extremely inefficient for us and them. For example, they would buy 5 million cases a year for stores and 500 cases (for) online and then make us go through a different buyer for online. It was a nuisance,” said a large consumer goods supplier.
Clearly with this move, Wal-Mart is trying to leverage the power of its Bentonville purchasing operation, where dozens of vendors have set up shop to facilitate their sales to Wal-Mart.