Merchandising shake-up at Walmart
It turns out the announcement earlier today by Walmart that Duncan Mac Naughton would serve as head merchant of the company’s U.S. division was but one component of a more extensive shakeup at the company.
Walmart issued a press release early Friday that Mac Naugton had been named CMO after serving just three months as EVP merchandising responsible for health and wellness, consumables and Walmart.com. However, other personnel moves and restructuring actions were disclosed only in internal company announcements beginning with a message from Wal-Mart Stores president and CEO Mike Duke under the heading of “How we are building the next generation Walmart.”
According to Duke, who was fresh off a trip to the World Economic Forum in Davos, Switzerland where Walmart hosted a breakfast, the next generation Walmart is one where the company could serve as many as 1 billion customers a week.
“If we are going to continue to meet and exceed our customers’ expectations, we must adapt to reach them on their terms. We’ll do this by collaborating in new ways globally, leveraging our talent and developing ways to service customers anytime, anyplace,” according to Duke.
Accordingly, Walmart U.S. president and CEO Bill Simon elevated Mac Naugton to the chief merchant role and then in an internal announcement spelled out several other moves, but did not mention who would be filling Mac Naughton’s shoes.
In operations, Raul Vasquez, who served briefly as EVP of Walmart’s western division was given a new role as EVP global e-commerce. Filling his position is Michael Bender who joined Walmart in 2009 from Cardinal Health and previously served as SVP of Walmart’s mountain division. Rosalind Brewer will serve as EVP of Walmart’s eastern division and will fill a position previously occupied by Hank Mullaney. Mike Moore will serve as EVP of the central region.
With Vasquez’s move to global e-commerce, he will oversee developed markets as part of a restructuring implemented by vice chairman Eduardo Castro-Wright. He announced that Wan Ling Martello would serve as EVP global e-commerce for emerging markets and business development. The company also expects to name an EVP and chief technology officer for its global e-commerce unit.
Castro-Wright said that Walmart global group created a year ago has a strong foundation in place, but the new structure “will ensure we are responsive to all of the multichannel shopping needs of our customers across every market.”
In addition to the U.S. merchandising and operations changes and the Global eCommerce developments, Walmart executives Rollin Ford, chief information officer, and Sam’s Club president and CEO Brian Cornell, announced a new team called Global Business Processes that will be led by Rick Webb as SVP innovations.
In the new role, Webb will be responsible for enhancing Walmart customers’ shopping experience, increasing the effectiveness of the merchandising, planning and marketing organizations and identifying opportunities to better optimize merchandise flow. Webb reports to Ford.
The company also created a new organization called Global Customer Insight and indicated it would soon name someone to lead the group.
Gift card scammer targets Home Depot, Lowe’s
A man already convicted of forgery and grand larceny in New York State is also facing a federal indictment that accuses him of gift card scams at Home Depot and Lowe’s totaling $78,800, according to an article in the Buffalo News.
Randall McGovern, 41, was convicted in 2010 for possession of stolen property and given a 3.5-year to seven-year sentence. In September 2010, he plead guilty to forgery and grand larceny for buying a 46-in. television set with a bounced check for $2,157; ordering an $8,400 industrial range and taking it home after pretending to be an employee of a local construction company; and selling some stolen construction equipment to a Niagara Falls company for $10,000.
McGovern now faces federal charges that accuse him and an unnamed accomplice of fraudulently obtaining and redeeming $42,000 worth of Home Depot gift cards in 2005 and 2006, as well as attempting to pull a $36,800 gift card scam on a local Lowe’s store.
Made in the USA
WOLF applauds “Made in the USA,” the special section HCN published in March. As a company sourcing American-made cabinets, decking and railing, WOLF gained insight from both HCN’s original survey and the experiences of other “Made in the USA” brands.
I took note of two points in particular: First, the overwhelming majority — more than 85% — of both manufacturers and retailers agreed that retailers can do a better job of promoting U.S.-made products. And second, that “Made in the USA” manufacturers have a “relatively inflated” expectation of consumer willingness to pay more for their products.
WOLF has very recent experience overcoming these challenges. Over the past three years, WOLF has developed and brought to market a range of domestically manufactured products. Our “Made in the USA” lines — WOLF Classic Cabinets, WOLF Decking, and WOLF Railing — have all rapidly built reputations for quality, and sales have exceeded very aggressive internal goals.
Our industry would benefit from an ongoing conversation about the twin issues of promotion and price as they relate to “Made in the USA” products. I’d like to push that conversation forward by sharing the perspective WOLF has gained over the past few years.
Beyond quality and jobs — benefits for customers
We all understand that we need to do more to promote U.S.-manufactured products, but WOLF believes everyone along the supply chain bears some responsibility for this — not just retailers. Part of this involves telling a richer story. Yes, our products typically offer higher quality and greater durability. And yes, we create American jobs. But there are other advantages for builders and homeowners:
• Closeness to the market: WOLF develops products by listening to the market. We have leveraged decades-long relationships with independent dealers, who have helped us identify underserved niches in the market. While retailers should do what they can to promote U.S.-made products, the onus is also on brands like WOLF to develop products that appeal to the marketplace.
• Greater control: U.S. manufacturers exert far greater control over design and production than our overseas counterparts. That control over raw materials, components, equipment, and labor results in higher quality — and in the ability to make continuous improvements to both products and processes.
• Better service: Makers of U.S. products have a key advantage: a far more efficient supply chain. We should do more to promote our faster, more accurate delivery of products, which builders clearly value. Broadly speaking, U.S. manufacturers also have better customer service after the sale, with policies and U.S.-based staff in place to resolve problems.
• New opportunities: WOLF constantly seeks feedback from our dealers and from contractors, which enables us to explore development of new products that retailers actually want — and can sell. Even better, savvy U.S. manufacturers — because they don’t have to wait for sluggish overseas partners, shipping time, and more — can bring a new color or style to market in weeks or months, instead of years.
Everyone agrees we can do a better job of touting the benefits of domestically produced building material. But that means manufacturers should help retailers tell the whole story and bring retailers in as partners in the research and development process.
Paying a “Made in the USA” premium?
According to the National Association of Home Builders/Wells Fargo Housing Market Index, “the biggest concern that builders have this year is how much they’re going to have to pay for building materials.” And yet, in the HCN survey, a sizable 45% of “Made in the USA” manufacturers agreed or strongly agreed that customers were willing to pay more for their products than for foreign-made counterparts.
Those competing viewpoints put unnecessary pressure on retailers. In fact, at WOLF, we’re convinced the old reflexive notion that American manufacturers simply can’t compete with low cost overseas competitors is fast giving way to a new reality that suggests they can. Manufacturers are already figuring out how to close the price gap with offshore brands, while at the same time widening the quality gap between American products and their inferior offshore counterparts.
In fact, many “Made in the USA” manufacturers, including WOLF, already have identified ways — again, because of our tight control over design, production and delivery — to bring efficiency to the process that drives down cost.
Clearly, “Made in the USA” offers value to everyone along the supply chain, including customers. In the coming years, we can all amplify that value — and grow sales — if manufacturers can work in partnership with distributors and retailers to explain the range of advantages to customers and bring new products to market that satisfy specific needs.
Tom Wolf is chairman and CEO of WOLF. In continuous operation since 1843, WOLF is the largest supplier of kitchen cabinets in the U.S. and a leading provider of building products. Over the past three years, Tom Wolf has orchestrated a dramatic turnaround, establishing WOLF as sourcing company that offers American-made, WOLF-branded products and other high-quality product lines exclusively through independent dealers. The move has fueled sales growth and doubled the company’s service area, which now covers 28 states. He is currently a candidate for the Democratic Party nomination for governor of Pennsylvania.