CityWire reports that Walmart is telling its suppliers that it "is going back to what works and that is the 'Everyday Low Prices' (EDLP) philosophy which begin with Everyday Low Costs (EDLC) of goods from suppliers."
In comments made last week at a supplier conference, CEO Doug McMillon said, “What we need from you is EDLP and EDLC. We are still fighting this battle in some parts of our business. ... That’s because it’s just so tempting to put an item on sale. Putting items on sale and special promotions have never worked for us. When we get away from our pricing model out in the middle of the road we get run over ... “We want to drive more business for you and us in a collaborative fashion. We are thinking about (how) dynamic pricing tools via the Internet can be applied and we don’t have it all figured it out just yet. But what I do know, is that our pricing objective is aimed at building customer trust."
According to the story, "Greg Foran, CEO of Walmart U.S., said at the meeting that the best of EDLC suppliers are already seeing benefits. He said one item retailed for $2.94 last year, but with supplier and buyer collaboration the price was taken down to $1.68 this year, with no reduction in quality. In response, Wal-Mart doubled its order to 13 million, up from 6 million last year."
In comments made last week at a supplier conference, CEO Doug McMillon said, “What we need from you is EDLP and EDLC. We are still fighting this battle in some parts of our business. ... That’s because it’s just so tempting to put an item on sale. Putting items on sale and special promotions have never worked for us. When we get away from our pricing model out in the middle of the road we get run over ... “We want to drive more business for you and us in a collaborative fashion. We are thinking about (how) dynamic pricing tools via the Internet can be applied and we don’t have it all figured it out just yet. But what I do know, is that our pricing objective is aimed at building customer trust."
According to the story, "Greg Foran, CEO of Walmart U.S., said at the meeting that the best of EDLC suppliers are already seeing benefits. He said one item retailed for $2.94 last year, but with supplier and buyer collaboration the price was taken down to $1.68 this year, with no reduction in quality. In response, Wal-Mart doubled its order to 13 million, up from 6 million last year."
- KC's View:
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I don't want to go too far out on a limb here, but so far, I'm really impressed with Doug McMillon - he seems to have some very clear goals, and is highly focused on initiatives where he can move the needle ... challenging existing business processes where necessary and reinforcing traditional strengths where appropriate. I don't know the man, but he seems to have just the right amount of swagger ... and I have the feeling that some of that swagger may be transferred to the company he is running. Which is not good news for the companies with which Walmart competes.
