Wal-Mart breaking new partnership ground - Taking Stock - Column

Discount Store News, April 19, 1993 by Arthur Markowitz

Le'ts start at the end, Wal-Mart's goal in both asking suppliers for customized business plans and its decision to limit or eschew dealing with reps.

Simply put, it's to devise direct partnership relations with manufacturers that will ensure an unencumbered, seamless flow of merchandise from suppliers through the retailer to consumers. And the flow of merchandise is to be tailored to each store and be based on such factors as the unit's market demographics, fashion interest, season of year and shelf space.

There's been a big "to do" about the 60-page Business Planning package sent to some vendors that asks them for unprecedented disclosure of merchandising/marketing information and projections. Whether Wal-Mart uses that document to obtain similar information from other suppliers or employs some other program is immaterial. The concept is right. Wal-Mart has the technology in place to act on the information it obtains and its request is a logical outgrowth of the partnering relationships it has established with many vendors.

Wal-Mart isn't the only retailer interested in a seamless flow of merchandise. It's the most advanced in its drive to achieve this goal. Other chains are working on more basic merchandising/operating elements looking toward the same end.

While other retailers play catch-up to Wal-Mart in the domestic sphere, the discounter is already moving into another merchandising orbit--international marketing. It's looking to operate its own foreign trade zone to enhance its importing and global trading activities. In its application to establish the zone, Wal-Mart siad its "goal is to increase its entry into the international market and become the leading global discount retailer." When it does, the programs it's pursuing to develop a seamless flow of merchandise in the United States will eventually accomplish the same objective globally.