WAL-MART’S TOOL: DATA FOR VENDORS
Byline: Georgia Lee
ATLANTA — By allowing suppliers access to detailed sales information, Wal-Mart’s Retail Link technology is giving new meaning to vendor-retailer partnerships.
“It’s no longer about lunch at 21 or a kinder, gentler relationship,” said John Lupo, senior vice president and general merchandise manager of Wal-Mart Stores Inc. “Today’s partnerships are about efficiently sharing information and empowering participants to do what is right to satisfy our boss — the customer.”
At a recent American Apparel Manufacturers Association Research Conference here and in follow-up interviews, Lupo urged apparel manufacturers to take advantage of Retail Link, a tool that has fast become a necessity in today’s competitive business climate.
“Retail Link is no longer an option,” he said. “Nobody can effectively manage [alone] a business as big as the one we have. We need help, and our vendor partners can provide it.”
Designed and developed by Wal-Mart in 1991, Retail Link works off a personal computer and is free to all Wal-Mart vendors. The Retail Link system uses Teradata, an AT&T product.
Every day, Retail Link downloads information from Wal-Mart’s computers to the vendor’s personal computer. Information includes: point-of-sale data, by stockkeeping unit and by store; warehouse movement; forecast analysis; electronic mail, and remittance advice. A decision support system gives the vendor 100 weeks of product sales history and tracks the product’s performance globally and by market. Specific sales information on a product is available only to that vendor.
“There’s no need for frequent meetings, no complaints about lack of information,” said Lupo. “Everything is provided for a win-win situation.”
More than 3,000 Wal-Mart vendors are on Retail Link, including more than 500 apparel vendors.
Lupo cited Americo Group Inc., a New York-based importer and manufacturer, as an apparel vendor that had most effectively used Retail Link to increase its business with Wal-Mart.
Americo began producing Basic Equipment, a private-label men’s casual sportswear brand for Wal-Mart, in 1991. The line started with test products in 78 stores and now is carried chainwide. Women’s sportswear, introduced in 400 stores last April, will expand to 900 stores by spring 1996.
Eli Harari, president of Americo, calls Retail Link “the most powerful tool in our business.” Americo employs 10 people just to analyze data obtained daily from Retail Link. “Collecting information is just part of it,” he said. “Sorting it out is an art form.”
With sales information on an individual store and sku level, Americo can customize assortments according to region and climate, and plan more accurately. Tracking denim skirt sales, which performed well in early summer this year, allowed Americo to beef up stock for back to school.
Analysis of sales data has led to more frequent changes in color palettes and concentration in specific sizes in certain stores.
“With Retail Link, we’re able to micro-manage, and tailor assortments to individual stores or regions,” said Harari. “We can also test-market in a limited amount of stores and track performance.
“The information drives our production planning department and replenishment systems and allows us to make adjustments,” he said, noting Retail Link interfaces with Americo’s automatic replenishment system.
Harari explained, “Sales information that is available to us is also available to Wal-Mart’s buyers. This opens channels for dialog and decision-making. By analyzing our sales minutely, we can also touch on details that buyers may not have time to address. With Retail Link information, we both can come to an easier consensus on what’s needed to grow business.”
Russell Corp., Alexander, City, Ala., uses Retail Link to track its Jerzees basic knit tops at Wal-Mart.
“It’s biggest value is allowing us to get closer to demand and know what’s selling at an individual store level,” said Joe Irwin, president of knit apparel for Russell. “It also allows us to stock colors and sizes by region.”
While Retail Link has been integral to Jerzees’ success with Wal-Mart, Irwin called for further refinement of the package to allow more intricate forecasting.
“The tool is good, but needs a better forecasting module,” he said. “All big discounters have to do better forecasting. We all share the burden. We can’t afford to miss even by 5 percent.”
While all of Wal-Mart’s thousands of suppliers have access to information through Retail Link, Lupo said apparel vendors had lagged behind hard goods suppliers in making optimal use of the system.
“The key is not just getting on the system, but in actually using it,” he said. “Its success is directly dependent on the willingness of both sides working together.”