Coronavirus is here. Unless you were living in a cave, you’ve undoubtedly seen the media pandemonium, heard people talking about it, or seen and felt the effects of it on both travel and the stock market.
According to this Nielsen investigation, consumers are rushing to create “pandemic pantries” across the US, China, and Italy. This means retail is not immune from the effects of the virus either, presenting some symptoms that, if not treated, can result in some long-term negative effects.
Walmart traffic was up almost 5% over the same week last year and up almost 7% versus the previous week. This spike in traffic is essentially the same as what was seen the week before Christmas!
The shelves reflect this unexpected spike, and now Walmart and suppliers are scrambling to get products back in stores.
So, let’s assume you are the ultimate Walmart partner, always having at least 6-8 weeks of extra supply on hand just for instances such as this.
What can, and should, you be doing to make sure you deliver for both Walmart, and the consumer? Here are three things Walmart suppliers should be doing to minimize empty shelves and capitalize on the consumer need during this seasonal anomaly.
1) Understand What is Really Happening at the Shelf
What I mean here is dig into your sales reports, daily in-stock reports, and market basket to get a true picture of what is happening at the shelf. Normally, we would say that you could drive yourself crazy looking at a daily sales report. In this case, however, you need to marry your daily sales with your daily out of stocks to get a true picture of what’s happening—including what did sell AND what could have sold. This will give you better data to deliver against the opportunity.
For example, if you simply take the spike in sales at face value, say double your average week, you might assume that you just need to ship in an extra case or two. In reality, your item may have been picked clean in a single day, then sat empty for 2 days before getting all bought up again in a day and then sitting empty for 2 days again.
This 10,000 foot sales view doesn’t deliver against what the true demand was, and you will being playing from a reactionary position. As a result, by the time you actually get to the place where you are shipping against the true demand, the need may be over.
2) Develop a Recommendation for Your RM and Buyer
Based on the information you gather, put together a recommendation to your buyer. For most, this recommendation will look like getting a few extra cases into the pipeline and maybe adjusting forecast up to match the additional store traffic.
For some, this will look like an opportunity to ship in extra pallets of inventory, some straight through to the stores.
The important thing is that you stay on top of GRS and making sure you aren’t getting sucked into the downward spiral of automated replenishment. GRS, while it is a great tool in times of steadiness, can also be a real barrier when situations like this manifest.
The reason why is because it looks at things from the topline sales perspective and can’t react quickly enough to the spikes in demand. It also can potentially be really harmful. If your product gets picked clean from the shelf and it takes a week to get anything shipped back, your week without sales could be registered as a downturn in your rate of sale. This will cause the forecast to go down so GRS orders even less, and then the system is stuck in a self-fulfilling sales prophecy. The only thing that can stop this is a manual intervention and recommendation to adjust.
This last one almost always makes our lists, and it is because it may be the single most important thing you can do in your relationship with Walmart.
Communicate to your buyer what you are seeing in the numbers and the recommendations you have.
Communicate to your RM the actions you recommend and include with it the SSO and/or forecast adjustment form with your recommendation. An important side note here is to go ahead and do the work that allows your RM and buyer to take action on your recommendation. Give them both the gun AND the bullets.
Communicate the bad of the situation as well. If you can only ship in half of what you believe is really needed, communicate that along with the “get well” date of when you can be back out in front.
We hope this information is valuable and helpful as we collectively navigate this opportunity. If any of this is foreign to you and you have questions or would like some help, please reach out.
Stay safe out there.