OPERATIONS

Discount giant’s inventory replenishment efforts are ‘top shelf’

BY Deena M. Amato-McCoy

Walmart is ensuring all in-store merchandise is ready for shoppers when they want to make a purchase.

The discount giant manages “millions” of items — making for a complex process behind the scenes. It's a process that requires constant monitoring, "and can sometimes take associates away from the sales floor where they would otherwise be helping customers,” Cristy Brooks, senior director – innovations development, Walmart U.S., wrote in a blog post on the company's website.

As a result, Walmart is experimenting with new processes to streamline in-store replenishment. Its “Top Stock” system moves back-stock inventory to the top shelves on the sales floor.

“By keeping additional merchandise closer to where it’s sold, we can maintain fuller shelves while keeping a better in-the-moment read on inventory,” Cristy explained.

The extra space now available in the back room is being leveraged in different ways. For example, some stores are using the space to support the retailer’s growing pickup service of online grocery orders — a program that requires adequate space for fulfillment and order storage.

Top Stock also reduces Walmart’s rental of temporary inventory trailers. Now the chain uses “a small fraction of what it was just a few years ago,” Brooks wrote.

Top Stock also frees up space that can be used for Walmart’s career-building education program. For example, the chain's store in Morrisville, North Carolina, reduced inventory in its back room by 75% within two months of implementing the system. With the available space, it was able to open an Academy for associate training.

“When we commit to coming up with unexpected ways to do the small things better, we not only become smarter and more efficient, but create a big win for our customers at the same time,” Brooks added.

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OPERATIONS

Starbucks’ Schultz in emotional address on Charlottesville

BY Marianne Wilson

Howard Schultz, the politically progressive — and famously outspoken — founder of Starbucks Coffee Corp., weighed in on the rally and violence in Charlottesville, Virginia, and its aftermath in an emotional speech to company employees.

Speaking at a standing-room only employee forum, Schultz did not specifically blame or criticize the President, saying he would let his (the President’s) actions speak for themselves. But the legendary retailer left little doubt of how he felt.

"What we witnessed this past weekend … is against every sense of what is right," Schultz said. "My fear is not only that this behavior is being given permission and license, but its conduct is being normalized to the point where people are no longer hiding their face. We’ve all seen pictures of the KKK in the South … they were hiding because they were afraid to be outed. People are no longer afraid."

The forum, titled "Hate Has No Home Here" and held at the Starbucks Support Center in Seattle, was designed as a space where employees could share their thoughts on the tragedy in Charlottesville, Virginia. More than 500 associates attended, with an additional 1,000 people in overflow areas.

In his remarks, Schultz invoked the Holocaust, and passed around a rock that he brought back from his visit to the Auschwitz concentration camp in Poland some 17 years ago.

"I come to you as an American, as a Jew, as a parent, as a grandparent, as an almost 40-year partner of this company," Schultz said in opening remarks at the event. "I come to you with profound, profound concern about the lack of character, morality, humanity and what this might mean for young children and young generations."

Schultz went on to say that "the moral fiber, the values, and what we as a country have stood for is literally hanging in the abyss. We are at a critical juncture in American history."

Schultz told employees that it was hard to maintain an optimistic view about the future in light of the current storm, but he still is.

"I raise my hand, and I say I am optimistic about our country and the true promise of America," he said.

Employee forums are a tradition at Starbucks. Schultz and Kevin Johnson, Starbucks' new CEO, hold them quarterly at the company’s headquarters and regularly in regions around the world.

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Report looks at what drives holiday sales

BY Marianne Wilson

Shoppers will do anything to qualify for free shipping — even spend more money if need be.

That's according to a new report by Radial and CFI Group, which surveyed online shoppers to find out what they expect from retailers during the holiday shopping season. Free shipping is seen as such a priority during the holiday selling season that 65% of the respondents said they are willing to purchase additional items to qualify for it.

Other findings regarding what influences online shopping during the holidays, include the following:

• 76% of shoppers will shop at a competitor's website if a retailer runs out of product.

• 95% will wait up to five days for standard shipping.

• 47% will shop with competitors the next time if a retailer's shipment arrives later than expected.

• 14% use in-store pickup as one of their typical delivery choices.

• 36% prefer live chat for customer service during the holiday season.

To meet these varying customer needs, retailers must have the operational flexibility to offer a variety of fulfillment options, according to the report. Inventory control, free shipping levels, standard shipping guarantees, in-store pickup options, and both phone reps and live chat must all be carefully orchestrated to deliver tailored experiences customers. And reps must be given the latitude to listen to and address specific fulfillment needs of each customer.

"It's about flexibility," said CFI Group CEO Sheri Petras. "If a retailer has all those fulfillment options available, the customer is going to be able to stay within that retail family, as opposed to shopping someplace else."

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