Flowers an important growth area for Wal-Mart
Flowers an important growth area for Wal-Mart
?Two to three years ago, Wal-Mart executives decided they wanted to grow their cut-flower and bouquet business," said Jennifer Springer, merchandising manager for Wal-Mart?s national floral program.
The company recognized that the grocery portion of its chain was where the floral was best placed.
Wal-Mart placed its focus on cash-and-carry cut flowers, and set goals to deliver the best value to its customers with the highest-quality flowers at the best-possible price.
Through much dedication within the company and an active involvement with its vendors, Wal-Mart is seeing its goals coming to fruition.
Hired in July 2004 to the department, Ms. Springer brings great depth to the company. With a degree in horticulture, she has been with Wal-Mart for 12 years, most recently in the garden department. She also has experience in its modular-planning department, so she knows how to get customers into her departments and get them to make purchases.
Wal-Mart prefers to keep its floral program within the supermarket concept. The firm started the program in its hypermart formats, and now most Supercenters and all the Neighborhood Markets have a cut-flower program. During the holidays, all the stores carry cut flowers. Wal-Mart has found that having flowers in front of the food section of a store implies "self purchase." In other parts of the store, customers are buying for others. In the food areas, they are buying for themselves, Ms. Springer explained.
Because Wal-Mart feels that this is an important growth area, the firm turned to its suppliers to help increase floral consumption in the stores. Wal-Mart decided that it wanted to offer a quality product at a reasonable price. An intense meeting and brainstorming sessions with suppliers resulted in Wal-Mart looking at all its practices. How could the company get the flowers from Colombia and other parts of the world to its distribution centers located throughout the United States in the most efficient manner?
Today, Wal-Mart has 32 DCs, and is plans to open two additional DCs this year. Each DC services 50 to 60 Wal-Marts, totaling 1,800 stores on a daily basis. The DCs have a challenging and aggressive goal of adding 250 new Supercenters every year.
The DCs do business with major suppliers in the major growing areas like Colombia and Ecuador, and are currently seeking more sources of California-grown flowers. Wal-Mart likes to buy locally if possible.
Wal-Mart has an expression, "store of the community," in which the company tries to buy exactly for the needs of each community. Ron McCormick, who has been with Wal-Mart for eight years and is vice president of produce and floral, said that this means the customer has exactly what they want and need in their local store. Mr. McCormick said that in addition to floral, Wal-Mart also tries to purchase locally grown produce whenever it is available for the stores, too. Ms. Springer added, "When your sales are $280 billion, you have to look at it one store at a time."
Ms. Springer said that it has worked. Wal-Mart has vastly increased the consumption of flowers, and the firm feels that it gives its customers good quality at a reasonable price.
Wal-Mart suppliers do more than deliver product, they are a primary component to Wal-Mart?s floral success, said Ms. Springer. "Suppliers are involved in the entire process from operations to marketing to merchandising," she said. They are also actively involved in training. "A big part of floral sales is on a holiday. Our mission is to sell floral for home satisfaction. We ask, "How can we get people to buy every day?? "
One of the answers to everyday sales is offering quality flowers that last a long time once in the consumer?s home, she explained. "We have our suppliers do quality tests in control labs. We promote days of guaranteed shelf life," said Ms. Springer.
Longer shelf life can result from tight logistics. Ms. Springer said that Wal-Mart asked, "How can we make the process simpler?? The answer the firm came to was that truck time and cooler times need to be short. "We deliver seven days a week. We believe in just-in-time delivery rather than having flowers sit in a DC or a cooler," she said. "The faster they are out of the store, the longer the consumer will enjoy their beauty."
She added, "We feel the industry has a lot of growth potential. Our focus is on continuous quality while driving cost out. We want to make sure that suppliers are profitable so they continue to grow quality and see growth in their companies, too. The end result is always the same: to get the best product to our consumer at the best price."
One of the keys to extending Wal-Mart?s fresh flowers? shelf life is a heavy investment in coolers and display equipment. "We decided we needed a better case, while still having the openness. We?ll have better product in the end because of coolers."
The flagship Wal-Mart Supercenter in Bentonville, AR, displayed a new B?rgen cooler in the main entrance. Filled with pre-made arrangements and bouquets, the flowers looked fresh and were perfectly located for impulse sales. In addition, another Floratech cooler was located between two busy checkout lanes. This cooler had buckets of fresh bouquets. Situated right in front of customers as they waited to check out their purchases, it would be hard to resist picking up at least one of the bouquets. "We?ll have a better product for our customers in the end because of our coolers," Ms. Springer said.
?Consumption is up," Ms. Springer said. She feels that the company?s existing floral customers are already buying, but Wal-Mart wants more repeat transactions. Now the company?s challenge is to get the non-buyer to buy. To switch a non-flower buyer to a buyer is to have them "think flowers," she said. "We have to make it affordable for them while giving them excellent quality and shelf life. This is another reason why we?ve moved our flowers to the food entrance. We want to expose great flowers to tons of people. Our customers have responded well," she said.
One of the keys to more sales is in the decorating area. "People are more involved in their homes," she said. "It's getting to be more about them and less about gift giving."
Wal-Mart is trying to get the word about flowers out as much as possible to its 95 million customers that visit the stores each week. The firm has in-house television networks within the stores. All TVs are set to the Wal-Mart channel. Consumers are exposed to flowers in these television spots. The company also runs spots on Wal-Mart radio, which is broadcast on a public address system while customers shop. "We call it Retail-tainment," Ms. Springer said. "Our store associates get very creative with it."
As one of the larger retail grocery companies in the world, many vendors would like to sell to Wal-Mart. But how does a company become one of Wal-Mart?s vendors?
Ms. Springer and Mr. McCormick said that the first step is to go to the Wal-Mart web site, www.walmart.com, and fill out a vendor form. Wal-Mart personnel will review the information and determine if the company is financially sound. Wal-Mart will ask itself, "Do we need their product?? If it is determined that it does, Wal-Mart will set up an appointment with the vendor for the first visit in Bentonville at Wal-Mart?s world headquarters. If the prospective company is successful, "We will then go to their facility," said Ms. Springer. "We negotiate a vendor agreement," she said. The company also has a supplier development department that searches for new vendors. "We also collaborate with the buyers from Sam?s Club, Wal-Mart Canada, Wal-Mart Mexico and Wal-Mart USA," she said. "If we are in search of a particular vendor, we may find it through one of the buyers. We can find out who is doing a good job with a particular product." How do buyers work when they are dealing with 1,800 stores nationwide? "We are an operations-driven company," Ms. Springer explained. "We look at the logistics, the costs, make sure the right product goes to the right store and we communicate with the operations through various sources."
She added, "We educate and communicate what is going on, what?s coming and so forth. The company has a live video tool that is linked to the stores called "The Wire? in which information is constantly shared with the associates. All Wal-Mart employees are referred to as associates. Ms. Springer said that Sam and Helen Walton, founders of Wal-Mart, referred to employees as associates since the founding of the company. She quoted the late Mr. Walton as saying: "Those folks that talk to the customers every day are the ones that make the company successful."
Wal-Mart also has holiday meetings and year-end meetings to communicate with its associates. Each store has a computer with educational information for training. The firm also holds training seminars in regional DCs. Buyers in the field also are responsible for training associates.
The company also has internal teams that consist of buyers, a logistics team, a replenishment team and a marketing team. In both produce and floral, there are 101 associates between Bentonville and the DCs.
The future is bright for Wal-Mart and the floral industry Because Wal-Marts are sometimes located in very small towns, Ms. Springer feels that this is an opportunity to expose flowers to people that previously did not have that opportunity. "We are the local florist in many towns," she said. Some customers have never been exposed to fresh flowers, so this is a tremendous opportunity for us and for them."
When asked what the future holds, she said, "Identifying stores with the right flowers, the right colors with the right price. This will increase consumption of flowers worldwide."
The company recognized that the grocery portion of its chain was where the floral was best placed.
Wal-Mart placed its focus on cash-and-carry cut flowers, and set goals to deliver the best value to its customers with the highest-quality flowers at the best-possible price.
Through much dedication within the company and an active involvement with its vendors, Wal-Mart is seeing its goals coming to fruition.
Hired in July 2004 to the department, Ms. Springer brings great depth to the company. With a degree in horticulture, she has been with Wal-Mart for 12 years, most recently in the garden department. She also has experience in its modular-planning department, so she knows how to get customers into her departments and get them to make purchases.
Wal-Mart prefers to keep its floral program within the supermarket concept. The firm started the program in its hypermart formats, and now most Supercenters and all the Neighborhood Markets have a cut-flower program. During the holidays, all the stores carry cut flowers. Wal-Mart has found that having flowers in front of the food section of a store implies "self purchase." In other parts of the store, customers are buying for others. In the food areas, they are buying for themselves, Ms. Springer explained.
Because Wal-Mart feels that this is an important growth area, the firm turned to its suppliers to help increase floral consumption in the stores. Wal-Mart decided that it wanted to offer a quality product at a reasonable price. An intense meeting and brainstorming sessions with suppliers resulted in Wal-Mart looking at all its practices. How could the company get the flowers from Colombia and other parts of the world to its distribution centers located throughout the United States in the most efficient manner?
Today, Wal-Mart has 32 DCs, and is plans to open two additional DCs this year. Each DC services 50 to 60 Wal-Marts, totaling 1,800 stores on a daily basis. The DCs have a challenging and aggressive goal of adding 250 new Supercenters every year.
The DCs do business with major suppliers in the major growing areas like Colombia and Ecuador, and are currently seeking more sources of California-grown flowers. Wal-Mart likes to buy locally if possible.
Wal-Mart has an expression, "store of the community," in which the company tries to buy exactly for the needs of each community. Ron McCormick, who has been with Wal-Mart for eight years and is vice president of produce and floral, said that this means the customer has exactly what they want and need in their local store. Mr. McCormick said that in addition to floral, Wal-Mart also tries to purchase locally grown produce whenever it is available for the stores, too. Ms. Springer added, "When your sales are $280 billion, you have to look at it one store at a time."
Ms. Springer said that it has worked. Wal-Mart has vastly increased the consumption of flowers, and the firm feels that it gives its customers good quality at a reasonable price.
Wal-Mart suppliers do more than deliver product, they are a primary component to Wal-Mart?s floral success, said Ms. Springer. "Suppliers are involved in the entire process from operations to marketing to merchandising," she said. They are also actively involved in training. "A big part of floral sales is on a holiday. Our mission is to sell floral for home satisfaction. We ask, "How can we get people to buy every day?? "
One of the answers to everyday sales is offering quality flowers that last a long time once in the consumer?s home, she explained. "We have our suppliers do quality tests in control labs. We promote days of guaranteed shelf life," said Ms. Springer.
Longer shelf life can result from tight logistics. Ms. Springer said that Wal-Mart asked, "How can we make the process simpler?? The answer the firm came to was that truck time and cooler times need to be short. "We deliver seven days a week. We believe in just-in-time delivery rather than having flowers sit in a DC or a cooler," she said. "The faster they are out of the store, the longer the consumer will enjoy their beauty."
She added, "We feel the industry has a lot of growth potential. Our focus is on continuous quality while driving cost out. We want to make sure that suppliers are profitable so they continue to grow quality and see growth in their companies, too. The end result is always the same: to get the best product to our consumer at the best price."
One of the keys to extending Wal-Mart?s fresh flowers? shelf life is a heavy investment in coolers and display equipment. "We decided we needed a better case, while still having the openness. We?ll have better product in the end because of coolers."
The flagship Wal-Mart Supercenter in Bentonville, AR, displayed a new B?rgen cooler in the main entrance. Filled with pre-made arrangements and bouquets, the flowers looked fresh and were perfectly located for impulse sales. In addition, another Floratech cooler was located between two busy checkout lanes. This cooler had buckets of fresh bouquets. Situated right in front of customers as they waited to check out their purchases, it would be hard to resist picking up at least one of the bouquets. "We?ll have a better product for our customers in the end because of our coolers," Ms. Springer said.
?Consumption is up," Ms. Springer said. She feels that the company?s existing floral customers are already buying, but Wal-Mart wants more repeat transactions. Now the company?s challenge is to get the non-buyer to buy. To switch a non-flower buyer to a buyer is to have them "think flowers," she said. "We have to make it affordable for them while giving them excellent quality and shelf life. This is another reason why we?ve moved our flowers to the food entrance. We want to expose great flowers to tons of people. Our customers have responded well," she said.
One of the keys to more sales is in the decorating area. "People are more involved in their homes," she said. "It's getting to be more about them and less about gift giving."
Wal-Mart is trying to get the word about flowers out as much as possible to its 95 million customers that visit the stores each week. The firm has in-house television networks within the stores. All TVs are set to the Wal-Mart channel. Consumers are exposed to flowers in these television spots. The company also runs spots on Wal-Mart radio, which is broadcast on a public address system while customers shop. "We call it Retail-tainment," Ms. Springer said. "Our store associates get very creative with it."
As one of the larger retail grocery companies in the world, many vendors would like to sell to Wal-Mart. But how does a company become one of Wal-Mart?s vendors?
Ms. Springer and Mr. McCormick said that the first step is to go to the Wal-Mart web site, www.walmart.com, and fill out a vendor form. Wal-Mart personnel will review the information and determine if the company is financially sound. Wal-Mart will ask itself, "Do we need their product?? If it is determined that it does, Wal-Mart will set up an appointment with the vendor for the first visit in Bentonville at Wal-Mart?s world headquarters. If the prospective company is successful, "We will then go to their facility," said Ms. Springer. "We negotiate a vendor agreement," she said. The company also has a supplier development department that searches for new vendors. "We also collaborate with the buyers from Sam?s Club, Wal-Mart Canada, Wal-Mart Mexico and Wal-Mart USA," she said. "If we are in search of a particular vendor, we may find it through one of the buyers. We can find out who is doing a good job with a particular product." How do buyers work when they are dealing with 1,800 stores nationwide? "We are an operations-driven company," Ms. Springer explained. "We look at the logistics, the costs, make sure the right product goes to the right store and we communicate with the operations through various sources."
She added, "We educate and communicate what is going on, what?s coming and so forth. The company has a live video tool that is linked to the stores called "The Wire? in which information is constantly shared with the associates. All Wal-Mart employees are referred to as associates. Ms. Springer said that Sam and Helen Walton, founders of Wal-Mart, referred to employees as associates since the founding of the company. She quoted the late Mr. Walton as saying: "Those folks that talk to the customers every day are the ones that make the company successful."
Wal-Mart also has holiday meetings and year-end meetings to communicate with its associates. Each store has a computer with educational information for training. The firm also holds training seminars in regional DCs. Buyers in the field also are responsible for training associates.
The company also has internal teams that consist of buyers, a logistics team, a replenishment team and a marketing team. In both produce and floral, there are 101 associates between Bentonville and the DCs.
The future is bright for Wal-Mart and the floral industry Because Wal-Marts are sometimes located in very small towns, Ms. Springer feels that this is an opportunity to expose flowers to people that previously did not have that opportunity. "We are the local florist in many towns," she said. Some customers have never been exposed to fresh flowers, so this is a tremendous opportunity for us and for them."
When asked what the future holds, she said, "Identifying stores with the right flowers, the right colors with the right price. This will increase consumption of flowers worldwide."
