🥗 What we learned from launching in 4200 Walmart Stores (Part 1)

Hey there, and welcome back for another bite to chew on.

We hope you’re having a productive week and are crushing through your todo list.

In this week’s newsletter, we’re talking about retail

In case you’re new here or haven’t seen, we just launched Obvi in 4200 Walmart stores nationwide, and wow…

What a rollercoaster it’s been

Now look…

Before launching in Walmart, we already had a little bit of retail experience under the belt by launching in Vitamin Shoppe, GNC, and Mom’s & Pop’s stores.

But…

Walmart is an entirely different beast. Period!

In this newsletter, we’ll talk about our learnings and failures from launching Walmart.

But since we can’t cover everything in one short newsletter, consider this part 1 of a series of newsletters about retail

Now, without further ado - let’s dive straight into it

You’ll never have enough resources for Walmart.

We thought we had everything in check…

Inventory

Team

Money

… and then, pow!

You launch and get hit in the face…

… and realize that you need WAY more resources than you had accounted for

But the problem is, you won’t know which type of resources you’ll need before actually launching.

Allow us to explain:

At Walmart, you get measured by this holy grail metric called “Units per store, per week” (We’ll call this UPSPW)

For Obvi, our goal right out the gate is to hit 1 unit per store per week (per SKU)

This means that if we’re in 4200 stores -, we have to sell 4200 units of each SKU

Now, the reason why you’ll never have enough resources is:

If you launch, and your UPSPW is good, You’ll need more manpower to figure out how you can move more product and generally do everything better.

If your UPSPW is bad, you’ll need to spend more money on marketing and promotion - and therefore, you can’t have too much budget tied up in team and inventory.

If your UPSPW is excellently good, you’ll need a ton more team AND money than you had originally accounted for.

… and therefore, launching in Walmart is this very delicate balance of managing and shifting resources fast.

Because If you tie too much money in personnel/team, you won’t be able to spend enough on inventory and marketing.

But if you invest too little money in personnel/team, you won’t be able to handle all the operations, logistics, and analytics required to keep Walmart happy.

… and the best part: You only find out how you should allocate resources once you’re on the shelves

Investing in fulfilment

The second most important metric you get measured by in Walmart is this metric called OTIF.

OTIF stands for “On time & In Full.”

This is basically a logistics metric that measures how good you are at getting all the inventory to the Walmart Warehouse “On Time and in Full”

Now, here’s where it gets tricky because:

If you don’t have a very, very tight grip on your inventory forecasting and fulfillment system (with your 3PL) ,

Then you’re going to have a hard time keeping this metric above 95%

So, what we did was we invested time and money in:

A) Always having extra stock in our 3PL that we can always tap into in case of extra demand

B) Building better relationships with our manufacturers and 3PL, to make sure that we could always adapt and make quick changes in case of a demand spike

C) Invested in hiring people who could help us be better at forecasting and analytics

Details matter more than you’d think!

We typically consider ourselves pretty detail-oriented, but when we started working with Walmart - we quickly realized:

We weren’t

We’ll elaborate much more on little details you should look out for in the next newsletter…

But we just want to give a fun example here as well:

Walmart had told us that the launch date for our brand would be in week 30

So, we figured that would be the August 28th

… and that’s what we announced across social, community, email, etc.

Now - what we didn’t know is that Walmart has it’s own calendar as well.

So when they said week 30, they meant August 21th

… and as you can imagine, we were pretty stressed when we found out our launch date was actually 1 week before we had planned.

Anyway - this is just to say: Details matter A LOT when it comes to big retailers.

This is a fun example of that.

Thanks for reading along

As always, thanks for reading along.

We appreciate you and look forward to serving you again on Sunday.

All the best,

Ron & Ash

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   1. Ronak Shah

   2. Ashvin Melwani