Did Walmart’s ‘Open Call’ discover a hit made in America?
The chance to get on the shelf at Walmart is a big opportunity for any supplier but especially so for smaller companies. In efforts to find suppliers that make part or all of their products stateside, Walmart recently held a full-day event called a Made in USA "Open Call," inviting potential suppliers to Bentonville to pitch their products directly to the chain’s executives, a model not unlike ABC’s popular television series Shark Tank.
The Open Call comes in concert with Walmart’s reshoring initiative, which is meant to source $250 billion in products from the U.S. by 2023. The initiative has been both lauded as an attempt to move jobs back to the U.S. and decried as a PR move from a company that was instrumental to the outsourcing trend and the decline of U.S. manufacturing.
According to an article in The Wall Street Journal, this is the second year the company has run the Open Call event. Open calls for potential new suppliers are rare but not entirely unheard of, and while they pose opportunities, they also bring with them particular concerns.
In an interview with RetailWire, David Biernbaum, senior marketing and business development consultant at David Biernbaum & Associates, described a standard pitch process for Walmart suppliers that sounds more like an insider’s game than an Open Call.
"[The] Best approach, by far, is to greatly improve access by hiring a knowledgeable consultant or master-broker with the proper knowledge, experience, and connectivity, who will appoint a local Walmart representative," said Mr. Biernbaum. "Otherwise, it’s not a simple process to get an appointment."
He noted that the Open Call could greatly benefit small suppliers, if they played their cards right.
"Overall, the ‘Shark Tank’ concept is great for Walmart, and even better for wannabe suppliers," said Mr. Biernbaum. "However, the overwhelming majority of wannabe suppliers are poorly equipped or prepared to make a full-point presentation to Walmart, or any other major retailer. … They are far too reliant to Walmart to do the ‘selling,’ and of course, that’s not what Walmart does."
The Wall Street Journal article offers an example of this, telling the story of Karen Posada, proprietor of a company that was unable to turn a profit on its organic pasta sauce despite having placement on Walmart’s shelves due to competition from Walmart’s private label brand and miscalculations over shipping costs.
Still, a chance at placement in Walmart is not something a small supplier would want to pass up.
"The main benefit is access that happens out of the norm, out of sequence, and out of the blue," said Mr. Biernbaum. "But again, most suppliers will go with great intentions and yet blow the opportunity, no matter how fantastic their innovation or product might be."
- Pitching Products to Walmart in 30 Minutes – The Wall Street Journal (sub. required)
- Walmart’s $10 Million Plan Is A Good Start – Forbes.com
- Will Walmart spark a reshoring movement? – RetailWire
Will open call events like the one at Walmart proliferate as a way for retailers to find new and innovative products? What do you see as the advantages and disadvantages of this model?