Laura Studaway

Yesterday, Walmart announced killer Q1 results with same-store sales up 3.8%. I had to tilt my head up 7% to watch the stock price jump. Their CEO, Doug McMillon, clarified right off the bat that the growth is not driven by inflation-fueled price increases (unlike CPG companies) but through volume growth. In fact, prices were not only not up, but down 25% compared to traditional supermarkets (Evermore IRI), all while expanding the margins. How is it possible that while CPGs have managed to take 15 years of price increase in the last 3 years, Walmart can still lower prices AND increase margins simultaneously? Using the customer value driver framework, I dove into their earnings report. 1. Household penetration: They increased household penetration and traffic by adding new shoppers. Walmart is known for its tagline "save money, live better,” which appeals to lower-income shoppers. However, their investments in omnichannel commerce are evolving their value proposition to value + flexibility + convenience, attracting higher income customers (>$100,000 p.a.). 2. Shopping frequency: They boosted shopping frequency by investing in the paid loyalty program Walmart Plus, which grew double-digits as members engaged more frequently and spent more than other customers. 3. Shopper conversion rates: Through the levers of merchandising excellence below, they increased shopper conversion rates. a) Assortment: Thanks to their investments in the Walmart Marketplace, they increased their product assortment beyond physical constraints and company boundaries. b) Availability: Through superior inventory management practices, they increased availability and lowered markdowns. c) Prices: They lowered prices through cross-subsidization from their higher margin retail media business and by increasing their presence in private label brands (introducing Better Goods). d) Experience: Finally, through frictionless experience, they drove higher conversion. E.g., they quoted an example of how they launched a new service enabling customers to order from an extended assortment of nearly 40,000 tires on their marketplace and have them installed at one of their 2,300 Auto Care centers and stores in the U.S. 4. Basket size: While the average basket size remained flat, they are investing in Gen AI powered solution-oriented product search (e.g., search birthday planning, you will get suggestions like cake, candle, knife, lighter, etc.). I believe this should be an area attracting more investments in analytics. 5. Margin improvement: A third of their operating margin improvement (~$300M) came from newer revenue-earning services like loyalty (Plus), retail media advertising (Connect), and data products (Luminate). Also, eCommerce growth added 12.5% to incremental margins as it became more profitable. On which of the above parameters can Walmart do better? Chime in with your views

81

6 Comments

I spoke with a large brand that made a HUGE sourcing mistake. They have a subscription box product business, with upwards of 10,000 boxes shipping per month. ➤ Sales are dynamite. ➤ New sales channels are opening up. ➤ Profitability is solid. But they had absolutely no clue who their factories were. You're reading this either wondering "how?!" or empathize because you may be in or have been in a similar situation. ------------------------------------------------------------------------------------ A quick sidebar on how they, and other brands, get into this situation: Many brands I see go through an evolution where they DIY the sourcing at the start: ➤ Finding suppliers on Alibaba. Or ➤ Finding a sourcing agency partner. The problem in the early years is that because it's "working," they never revisit their supply chain to re-strategize—instead focusing energy on marketing and selling their product. Years pass. The business grows. With a growing business and team, time and energy are now available to focus on company-wide improvements. Finally, the supply chain receives more attention. ------------------------------------------------------------------------------------ Now back to the story. This brand is working with an agent who hasn't shared and refuses to share the factory information. So if they leave the agent, they have to start re-sourcing everything from scratch. We're talking hundreds of SKUs on custom products with molds. 😱 This obviously creates a massive blind spot and risk for the brand. Of course this story isn't complete without sharing how to avoid this. Here's how: 1. Go direct: From the beginning, work directly with factories so you know exactly who you are working with and can build a real relationship. 2. Avoid trade companies: See point #1 above. 3. Choose agencies wisely: Commission-based agencies are usually heavily incentivized to not share the factory information. Look for non-commission-based agencies like us at China Product Pros or others like us who transparently share factory information. Before working with an agent or agency, ask if they will share the factory info with you. Overall, maintaining strong and transparent supplier relationships is really up there in importance for the long-term success of any product brand. What are some lessons you have learned from sourcing products? 👉 Like this content? Don't miss out! Join my exclusive monthly newsletter written for ambitious e-commerce brand owners. Make better sourcing decisions in China. No fluff, no ChatGPT used. Subscribe now in 10 seconds via the link in the comments section. #chinaproductpros #chinasourcing #sourcingagency #sourcingagent #ecommercesourcing

14

3 Comments

If you’re a brand owner or work for one, this insight is for you. New factory partners frequently share that our approach is a "breath of fresh air" in the industry. Unlike their normal partners—aggressive trade companies and commission hungry agencies—we are fully client-side representatives and don't take commissions. Let me break down how that's different and why it matters. Trade companies and most sourcing agencies bake their commission into: ➤ Client purchase orders ➤ Client mold costs ➤ Client sample costs ➤ Client shipping costs They normally make money on both sides—also taking a big piece of the profit pie from factories in the form of commissions. If you work with a trade company, not only is your cost inflated, but there is a factory out there making your order who is also getting squeezed. So, when we roll up to a vetted factory with a perfect fit client not wanting a commission, it's a huge surprise. A pleasant one. What's not to love? The factory gets to work directly with a great client, building a long-term relationship. With a trade company or agency, they rarely know who they are working with, as by design, they have zero contact. With our approach, the client gets introduced to the best fit factory and avoids the heavy middleman markups that are so standard in the industry. As a brand, it may often "seem" like a deal when you work with a trade company or agency, because you aren't paying anything upfront. But the additional cost is baked and hidden in the inflated unit cost. This often adds up to 30% more on your cost of goods on every order. It's significant. This is why Xiaofeng Wu, I, and the whole team at China Product Pros love coming to work every day. We're making a meaningful change, one client and one factory relationship at a time. What do you think? Have you experienced hidden costs with trade companies or sourcing agencies? 👉 Like this content? Don't miss out! Join my exclusive monthly newsletter written for ambitious e-commerce brand owners. Make better sourcing decisions in China. No fluff, no ChatGPT used. Subscribe now in 10 seconds via the link in the comments section. #chinaproductpros #sourcingagency #chinaproductsourcing #sourcingagent #doingbusinessdifferently

10

1 Comment

While buying a mattress at a furniture store, my partner brought to my notice a sign in that section that read “For the best outcome and to prevent sagging, keep rotating for balanced use” Got me thinking about how this is not only true for mattresses but also excellent advice for leaders. Often, as leaders there is understandably a certain level of comfort and confidence in working with some team members. They tend to be “on the same wavelength” or “just get things done”. And whenever there is a crunch situation, we turn to these trusted lieutenants. The challenge occurs when the one-off situation starts becoming a regular feature. Those overburdened may get burned out. Those ignored may seek pastures that allow them to excel. In either scenario, nobody wins. For the best outcome, keep rotating for balance :)

76

2 Comments

One of my biggest failures: I once tried to sell ice cream during monsoon season. But this experience taught me so much about why having a growth mindset is important — and what happens when you’re too stubborn to recognize that. Early in my career, I worked my way into an opportunity as a Marketing Director for Unilever’s Indian ice cream operations. The business was in a highly competitive category in dire need of a turnaround, and I was feeling positive about having a new challenge: building the brand, accelerating impulse ice cream sales, and improving business profitability. I walked into my new role and committed to turning things around in just 100 days.  Unfortunately, we ended up launching right in the middle of India's monsoon season and undershot our goals fabulously. I was hugely disappointed. Worse was that I was less open to feedback than I should have been. I failed to recognize the learning opportunities, and had no interest in finding silver linings. After it became clear that our ice cream sales strategy wasn’t working, we pivoted to a new approach of placing kiosks in Indian malls, which were booming at the time. It was a risky idea but it ended up having real potential. It also helped me build restaurant industry know-how, recruit key talent and understand customer service. I learned a lot from that experience, such as the ability to pivot, the importance of being receptive to feedback and the recognition that instead of focusing on negative outcomes, to look for learning opportunities instead. Share your most memorable “failure” and more importantly, share what lessons you learned from it.

316

22 Comments

What if genuine consumer reviews could be the game-changer your retail strategy needs? Two of Doing Business in Bentonville's regular hosts debate, as Scott Benedict and Andy Wilson unlock the secrets behind harnessing the true power of user-generated content in this episode of "Digital Front Door." Join the two retail veterans as they explore the journey of UGC from simple product ratings to becoming an invaluable feedback engine that influences both online and in-store retail environments. Discover how UGC not only boosts SEO and product visibility but also serves as a goldmine of insights for product managers, guiding them in making informed decisions about both current and future products. #ugc #dbbnwa #omnichannelretail #digitalmerchandising

3

According to a Progressive Grocer article that published this week “Majority of Shoppers Won't Buy Nonfood Items at Grocery Stores” Acosta SVP Shannon Hodock states “We believe grocery retailers have an exciting and expansive opportunity to capture and grow HBC and GM sales. "Strategically, retailers need to create a targeted 'get on the grocery list' campaign for their shoppers, incorporating a holistic omnichannel strategy and a customized marketing plan as they tackle the three key challenges to overcoming current perceptions and shopping habits." For these retailers looking to capitalize on “gateway” categories and seek growth and grow share of impulse sales than ECRM should be in your playbook. You can check out our GM/Non-Food solutions programming in link below. We have also seen a great uptick in new items within our RangeMe discovery platform within these categories. https://lnkd.in/eCuH9gVJ #nonfoods #generalmerchandise #impulse #seasonal #grocery

16

1 Comment

The machine that matters most to my customers is seconds away from being destroyed… My friends say I need an OtterBox. Because answering calls from my customers is the most important thing I do to make manufacturing easier for them. Sure… Making great products helps too. Like: Hosiery Jewelry Footwear Handbags Pet products Beauty products We can make almost anything… But there are 2,800,000 manufacturing facilities in China. There’s nothing we make that 1,000 other factories can’t. So what makes us different? When you’re thinking of using a more vibrant orange for your thread color… Or wondering how hard it would be to emboss your logo on the top of your box… Or you’re stressed out because your 3PL needs exact box dimensions now… You can always get someone on the phone — me. Look: Our products are great. Our prices are competitive. But the ability to ask questions, get immediate answers, and communicate with a human being? That’s why our customers keep working with us year after year. And why I’ll keep a good grip on my phone until I give in and buy a case. In a world where AI customer service is taking over– Can your customers get you on the phone? Is it even important to them? I’d love to hear your thoughts in the comments.

13

6 Comments

Walmart is offering half off Walmart+ memberships until July 18, ahead of Amazon's Prime Day on July 16 and 17. Until July 18, Walmart is offering Walmart+ memberships for $49 a year, or half off the usual $98 fee. The rivalry between Walmart and Amazon continues, with Walmart aiming to attract customers from the e-commerce giant. Walmart's CFO mentioned that delivery orders surpassed in-store pickup orders, and Walmart+ members are ordering more frequently with fewer items, resembling Amazon shoppers. Walmart has been expanding its marketplace of third-party sellers and utilizing its physical locations to fulfill online orders. The company is implementing upgrades in its stores to boost sales, both in-store and online. Walmart is adopting strategies similar to Target and Amazon to attract and retain customers. #walmart #amazon #primeday #usretail

3

As a lifelong retail merchant, I'm going to potentially have a stroke if the retail media continues to report sequential month-over-month results as an indicator of anything. Year-over-year results are indicative of true performance, with the caveat of a shift in a key seasonal event like...I don't know, perhaps Easter...that will impact the natural trends in consumer purchase behavior. In good news, inflation appears to continue to be cooling...good news unless you are trying to convince your buyer that a price increase you took previously should not now be reversed. Good luck with that, by the way... #retailmerchandising #retailsales #inflation

38

5 Comments

🎭 Master Class in Receiving Customer Feedback: A Real-Life Drama Unfolds 🍝 As professionals, we all know that customer feedback is invaluable. It’s a chance to improve, adapt, and meet the needs of those we serve. However, my recent experience with a small CPG company’s response to my honest feedback has left me both amused and bewildered. Here’s a brief recount of this unexpected saga: 🌟 The Feedback: I recently tried a new sauce that I received as a gift from my mother and, unfortunately, it wasn’t to my liking. As a fan of culinary delights, I decided to share my thoughts with the company, hoping it might help them improve their product. 💥 The Response: Instead of a constructive conversation, I was met with accusations, threats of legal action, and an astonishing display of paranoia. Apparently, my feedback was perceived as part of a grand conspiracy! The situation quickly escalated into a full-blown detective story, complete with IP address tracking and dramatic ultimatums. 🎓 The Lesson: This encounter has reinforced a crucial business lesson: How you handle feedback speaks volumes about your brand. Here are a few key takeaways: 1️⃣ Stay Professional: No matter the feedback, maintain a professional tone. Emotional reactions can escalate situations unnecessarily. 2️⃣ Listen and Understand: Genuine feedback is a gift. Listen to your customers, understand their perspective, and use it to improve your offerings. 3️⃣ Stay Calm and Respond Appropriately: Even if the feedback seems unfounded or harsh, respond calmly and with grace. Your response reflects your brand’s values. 4️⃣ Seek Solutions, Not Conflicts: Instead of seeing criticism as an attack, view it as an opportunity to grow and refine your product or service. This experience, while bizarre, has been a reminder of the importance of humility and openness in business. Let's embrace feedback with gratitude and a willingness to improve. #CustomerFeedback #Professionalism #BusinessGrowth #LearningFromExperience #CustomerService #MasterClass

2

On this Monday, let’s talk about ELEVEN pillars for developing strong strategic partnerships. 1) Do your research. -no strong relationships can be developed without a mutual understanding. 2) Value alignment. -confirm that your mutual goals and overarching principles are aligned as this is important to garner long-term successful relationships. 3)Goal setting -what can you accomplish “better together”? 4) Communication. -share the reasons for the partnership and strategy with the appropriate stakeholders to ensure that everyone is aligned. 5) Clarity. -what does success look like for both orgs or involved parties? This can be financial, soft goals, otherwise or all. 6)Timebound milestones. -when do you want to accomplish these milestones? 7)Regroup and revise. -no successful partnership has longevity without re-evaluating along the way via “stage gates”. Markets always shift. 8)Continue to build. -depth and breadth of relationships are key. Don’t stop with one relationship or set of relationships. Businesses change. So should the people involved in communicating. 9)Celebrate successes. -take time to recognize what you have accomplished together and where you are going with the mutual support!!! 10)Bring your best self to the conversation. -continue to show up prepared and with the lens of shared success. 11)Think big, add value, and stay up to date on trends. -don’t ever lose sight of the competitive landscape, but don’t let it overwhelm you. Focus on winning within your niche. What would you add? Picture for reach. #strategicpartnerships #strategy #flavor #winning #wintogether #bettertogether #notwrittenbyAI #productdevelopment #trends #partnerships #motivationMonday

45

5 Comments

When was the last time a significant change took place in your organization? In my latest blog, I share my thoughts about why it's probably been too long. Door and Window Market [DWM] magazine #leadership #leadershipblog #changes #entrepreneurtips #entrepreneur #businesstips #businessleaders

8

I once spoke on a Career panel at my alma mater. That day, a co-panelist offered the audience the best piece of LinkedIn advice I had ever heard. If you are trying to connect with someone with whom you have no relationship, include a note with your invitation. Who are you? Why do you want to connect? Since that day, I have adopted this approach. I think about all the connection requests I receive. 90% of them offer no introduction or context. No thanks. I don’t have some rigorous approval criteria, but it’s also not my goal to connect with just anybody who is willing. Similar story: In my MBA program, during our job-hunting days, one of my classmates used this approach with great success. He would send connection requests to prominent university alumni, mention their shared education connection, then ask if they’d be willing to advise him. He built his network quickly and I remember being impressed by his resourcefulness.  It takes an extra ten seconds to write a note with your invitation. I promise you’ll see improved engagement. #CareerDevelopment #CareerGrowth #ProfessionalDevelopment #Management #Careers #Leadership #LinkedIn #Networking

19

Valuable Insights for those of us in Marketing & Sales within Consumer Goods

8

1 Comment

Get ready, to be inspired! Another incredible episode of Pushing the Envelope airing tomorrow! I had the privilege of sitting down with Jinnie Lee Schmid (she/her), whose journey and insights are nothing short of inspiring. This episode is packed with valuable lessons and personal stories that you won’t want to miss. Tune in to hear about: 🔺 Jinnie’s unique path from politics to consulting 🔺 How to embrace adaptability and thrive in any environment 🔺 Proven strategies for successful change management 🔺 The transformative impact of coaching on personal and professional growth 🔺 Practical advice on addressing grief and supporting emotional well-being in the workplace Jinnie’s wisdom and experience offer powerful takeaways for anyone looking to push their own envelope and achieve greater heights. Make sure to catch this episode—it’s one that can truly make a difference in your life and career. Mark your calendars and join us tomorrow for this conversation. Register 👇 and get ready to be inspired! 🔗 https://lnkd.in/epxxPs3b #ManagementConsulting #ChangeManagement #ProfessionalGrowth #GriefRecovery #Adaptability

4

1 Comment

Does your retailer have "hidden sentiment destroyers" lurking on the shelves? Can you recall a time when you went shopping and found something where the price really stuck out to you as being a lot more than what you know other places are charging? Like really stuck out. Made you do a double-take? Obviously it's unrealistic to expect everything to be the cheapest. Often people pay a couple $ more if they're already there, or they like the store, or it has other stuff they need etc. But there's a limit to HOW much more people are willing to pay before they feel they've been ripped off. The question is, what's that limit? Couple bucks here and there, $10 or even $20 on a bigger item, but $50 more? $100? It might sound exaggerated but every retailer has them. Products so out of line with competition that once customers notice, it's not only the immediate sale at risk but also their trust and confidence that takes repeated exposures to build. Often it's due to retailer margin targets that are too high, and too broadly applied across the whole line. But it's mostly a visibility issue, without an automated tool there's NO way you can keep track of 100,000 SKUs in any given week. This is where automated software comes to the rescue - find one that is specifically trained to understand YOUR category and your business, and root out these "hidden sentiment destroyers" today. SmartPriced Analytics

4

Ahold Delhaize’s net sales in the U.S. declined slightly during the first quarter of 2024 on a year-over-year basis, but the grocery company’s comparable-store sales growth returned to positive territory after turning negative in the final quarter of 2023, the retailer reported Wednesday. #groceryretail

4