WAL-MART PUSHING SUPPLIERS TO TAP INTO POS DATA
SUPPLIERS SHOULD HELP MANAGE RETAIL INVENTORY, LUPO TELLS AAMA

Byline: BRENDA LLOYD

ATLANTA (FNS) — Wal-Mart’s Retail Link is no longer an option for suppliers, John Lupo, senior vice-president and general merchandise manager of the world’s largest retailer, said at the American Apparel Manufacturers Association’s 1995 Apparel Research Conference in November.
He said Wal-Mart wants it suppliers to make better use of the comparative point-of-sale data Wal-Mart gathers from its stores. The data available through Retail Link can help manufacturers boost the sales of their products in Wal-Mart stores and even facilitate vendor-managed inventory.
“Neither myself, nor anyone at Wal-Mart, can effectively manage a business that is as big as the one we have,” Lupo said. “We need help, and I firmly believe that our vendor partners are the individuals that can provide that help. Who knows more about their product then they do?”
Lupo was especially targeting the apparel industry in his statement. He informed apparel manufacturers attending the annual conference that Wal-Mart’s hardlines vendors are making better use of Retail Link, a software package that Wal-Mart owns and designed and has had in operation since 1991, than its apparel vendors. He acknowledged that, to some degree, it is the nature of the business — that it is easier to project and track Kodak film than a rayon blouse or shirt.
But, he added, much of the apparel industry still is more concerned about “sell in” rather than “sell through.”
With a projected sales goal of around $97 billion this year, a $15 billion increase over last year, Wal-Mart is the 12th largest company in the world. The retailer has more than 2,200 Wal-Mart stores and more than 400 Sam’s Clubs in the United States, Canada, Mexico, Argentina, Brazil and Hong Kong, and next year will begin operating in China and Indonesia, according to Lupo. Wal-Mart, he continued, has more than 100,000 SKUs — the largest in discounting. The company’s computer systems are the biggest in the industry.
Retail Link helps keep Wal-Mart’s merchandising size and the demands placed on it under control. Wal-Mart has around 2,000 partners now. A few of Wal-Mart’s most successful partners are VF Corp., Sara Lee, Fruit of the Loom, Kellwood Inc. and Oxford Industries. These are all large companies, but Lupo said that small companies can easily participate, too.
“No big expense is required, so all vendors, large and small, can participate [in Retail Link],” Lupo said. This communication and translation package is run off a fairly common personal computer, but should be a powerful computer and needs someone to analyze the information. Wal-Mart provides the software free of charge to the vendor and will help train vendors in its use. “In today’s high-tech world, this is really cheap,” Lupo said.
Retail Link captures every bit of information, which Wal-Mart shares with vendors. That includes point-of-sale data by SKU and by store, warehouse movement, forecast analysis, electronic mail and remittance advice. It gives the vendor 100 weeks of product sales history by tracking a product’s performance globally and by specific market. That helps vendors serve individual stores. For example, he noted, “Olympics merchandise is selling very well in the Atlanta market, but it’s not doing anything in Texas.”
The system downloads information every day from Wal-Mart’s computers to a PC at the vendor’s facility, he continued. Then the vendor has unlimited access to their own information and will be able to format the data to their own needs.
Vendors also can manage their own business at retail through Retail Link. In 1991, for example, Wrangler jeans weren’t selling well in Wal-Mart stores, Lupo said. Wrangler management thought they could improve the business if they ran it themselves. This year Wal-Mart is on track to sell 25 million pairs of Wrangler jeans, according to Lupo.
The same scenario happened with a blouse manufacturer on the West Coast. A year ago, the company was on track to sell 100,000 blouses when the manufacturer told Wal-Mart it wanted to manage the business. “We ended up selling a million units of this blouse and this guy completely managed it,” Lupo said.
The objectives of Retail Link are to focus on business measurements, such as sales, margin and inventory markdowns, returns and purchases, to provide exceptions, identify accountability through performance reporting and to provide a new way of thinking, Lupo said.
“We continue to enhance it almost daily,” Lupo said. Some future updates include forecasting sales dollars, as well as lost sales, and forecasting at zone and warehouse levels.
Wal-Mart wants to measure margins through historic items cost, warehouse and transportation cost, margin dollars and percentage; measure inventory through turns, average inventory, in-stock percentage and in-stock demand; and measure markdowns through rate of sales before and after action, lost profit and sales, a Wal-Mart competitors checklist and projection of future dollars.
“A reduction of the supply-chain’s excess costs is the goal behind all this,” Lupo said.
Consumers are demanding more of retailers and their suppliers in this decade in terms of better quality and lower pricing. “The consumer continues to demand more from us,” said Lupo. “The challenge is to listen to our customers and respond to their needs. We need to be faster than the next guy. If they want it today, you have to give it to them today.” Apparel has been a “traditional weakness” at Wal-Mart, but the retailer is doing something about it now. Through its own labels or licensing agreements, Wal-Mart is developing its own brands, which are all denim or denim-related, casual, or active, except for its Kathie Lee brand, which is career-oriented. That label has outsold projections, Lupo said.
The other brands are White Stag, Catalina, Faded Glory, Puritan (opening price point in men’s wear), and McKids, which Wal-Mart will launch in January. Basic Equipment, a basic updated sportswear line, is a highly successful men’s wear line that Wal-Mart has expanded into women’s. It is in all stores in men’s wear, and will be in 900 units by spring ’96 for women, Lupo said.
Wal-Mart offers these lines through vendor partnerships, but sources the product itself through its vendor network.
“Vendor partnerships are about efficiently and effectively sharing information and empowering the participants of the partnership to do what is right to satisfy all of our bosses — the customer,” Lupo said.

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