Trends 2020: Walmart and Amazon

One of the latest changes coming out of Walmart HQ in Bentonville that could directly affect suppliers is a promotional signage purge intended to reduce clutter at the shelf. Exactly how much and how broadly Walmart is pulling back on promotional signage remains to be seen, yet a third of respondents already anticipate that the new restrictions will impact their organization’s sales at the retailer. Naturally, the anticipated impact seems to be most pronounced among product categories (such as grocery) that rely heavily on signage to promote new items and offers. “Our category relies on frequent impulse purchases, so removing the signage that help call out the product could negatively impact the impulse purchases at shelf,” one respondent said. Another commented, “It reduces the chance for messaging to the shoppers and impacting their behaviors, ultimately cutting in-store communications opportunities.” Those who weren’t worried that the change would impact sales reported that their organizations already spend minimally (or not at all) on custom signage. “I think shoppers are so much more mobile now that the impact of in-store signs has significantly decreased,” one respondent suggested. Another said: “There are now digital capabilities that we can leverage to target our consumers.”Alternative areas of potential investment cited by respondents ranged from pallets/endcaps to digital media/360-degree omnichannel investments and retailtainment, to Walmart owned co-op programming. One respondent even foresaw the ability to make up for any slight impact on store sales through Online Grocery Pickup volume.A year ago, as part of its efforts to improve digital capabilities, Walmart introduced preferred digital content partners to help ensure that technical issues and business priorities are addressed efficiently and effectively. About one-fifth of survey respondents indicated that working with these partners has improved business, but many still aren’t sure of the impact (27.0%) or aren’t even engaging with them (32.4%).Another strategy that has become increasingly more visible and nuanced at Walmart and other big retailers like Amazon is partnering with suppliers on exclusive brands. Among respondents who are already executing (17.8%) or considering (32.9%) this strategy, the motivations ranged from a spirit of partnership and avoiding trade conflict to the opportunity to test new products on a large scale and increase sales volume – or, as one respondent put it: “because money.” Another respondent went so far as to say that “mass market cookie-cutter brands are dead” because good strategy requires building around unique shoppers at key retailers.Meanwhile, Amazon’s recent competitive advertising practices – including placing competitor ads on product detail pages and private-label ads under add-to-cart buttons – have already had a negative effect on business at the retailer for 11.4% of respondents, while another 31.4% said they aren’t sure of the effect but are concerned. Many (44.3%), however, said Amazon’s practices haven’t had any effect yet.

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