Walmart has advised (read: threatened) a brand in a prominent category that they may auction the shelf space and only carry three brands, instead of the current 12 or more.
A jarring threat, given the amount of national sales volume Walmart comprises. If Walmart follows through, one brand that will certainly be included is private label, leaving only two branded players.
Which brands are most fearful of this threat? Every brand that knows that their products are actually or essentially "me-too". The bid of the "Me-too" brands in the auction process will include a bunch of data about how their brand is unique and irreplaceable in the consumer's mind and that their advertising drives the category. That approach won't sway Walmart in their effort to simplify the shopping experience at shelf, cut costs and drive margin. The brand's bid to maintain their spot will also include short term tactics like price reductions, special Walmart-only skus and promotions.
Brands that don't have a dominating share (which is very different than just having the leading share), and/or a history of providing noticeably different and demonstrably better products, will be on the outside looking in.
What are you doing to make sure that your brand is insulated from this type of move?
O.D.O.o.O.D.B.
Update: Walmart recently made good on this threat in the trash bag category and is sure to apply the approach in others.
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