March 2, 2009
R&FF Retailer: It’s ‘Win, Play and Show’
By
Warren Thayer, Editorial Director, R&FF Retailer
Through
a special arrangement, presented here for discussion are excerpts of a
current article from Refrigerated & Frozen Foods Retailer magazine.
Having written the book
about taking costs out of the supply chain, Wal-Mart is now focusing on
building growth categories and taking market share. To bring all this about,
Wal-Mart has developed a category framework it calls "win, play and
show." It is tied to each category’s growth potential and Wal-Mart’s
advantage of scale there.
Also important is the
credibility Wal-Mart might or might not have as a destination for the category.
A "win" category typically is growing at twice the rate of its
business unit. On a conference call, John Fleming, EVP and chief merchandising
officer, cites, by way of example, pet products — a fast-growing
category where Wal-Mart has a scale advantage. You can expect to see Wal-Mart
adding SKUs to "win" categories.
A
"play" category (not "place," as in horse racing, although
the analogy is apt) is one that is growing, but not as quickly as a win category.
A play category may also be a stable business where Wal-Mart has a scale
advantage and can offer highly competitive prices. An example here might
be denim, where Wal-Mart has a huge scale advantage but doesn’t have access
to the full range of product. Since it will thus not be seen by consumers
as a destination for denim, it will not invest as heavily here as it will
in pet products. You can expect stability in SKU counts in "play"
categories.
By the way, we’re using
pet foods and denim as examples because those were the ones used by Wal-Mart
execs in their conference calls. But you get the idea.
A
"show" category is typically one that is on the decline, and one
where Wal-Mart may not have a scale advantage or credibility as a destination
retailer. This category’s mission is to fulfill Wal-Mart’s one-stop shopping
proposition, but you can expect to see ongoing SKU rationalization here.
"It’s important
that we have tape measures, but we don’t need to have 28 tape measures,
which before we started this process we actually carried at one time," Mr.
Fleming says. "It gives us the opportunity to really rationalize the
assortment and supplier base to be able to drive more productivity, to
be able to invest in the win categories."
He goes on to say that, "We
should never feature products from a ‘show’ category. We used to all the
time and yet those are categories that are declining. That is not what
we should be using our feature space for. So it just gives us a framework
to be more efficient, but I think even beyond that to be more relevant
to customers."
Discussion Question:
What do you think of Wal-Mart’s ‘Win, Play and Show’ merchandising strategy?
What are the advantages as well as the limits of such simplification?
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Walmart’s “Win, Play, Show” reminds me of the Boston Consulting Group’s growth-share matrix–the quadrant chart used to differentiate strategic business units as either “star,” “cash cow,” “question mark” or “dog.”
It’s a potentially useful piece of input for master store planning, an operational discipline that is glaringly lacking in our industry.
So I’m not impressed yet. I might be, if Walmart uses this process to better allocate department space and adjacency.
This sounds like standard category management with new names. Own the categories where you can differentiate, and milk them for all the margin you can. Identify the next set of categories with potential, and focus marketing/promotional dollars to move them up. For the rest, minimize investment knowing that they are necessary but will never directly contribute to margins.
The key here is effectively using analytics to correctly categorize the products, and identifying the right strategies for continued growth. To get this right takes a strong understanding of customer demand and its levers.
It’s a good strategy but nothing revolutionary. There have been several similar strategies over time such as “Grow; Nurture; Exploit,” etc.
I agree with David that the concept of dividing your categories into multiple segments has been around for some time. The WM terminology may be different, but the underlying concept is the same–what are the categories where you have an advantage, where you are competitive, and where you just want to do maintenance?
I also agree that in order to execute this strategy you need to be brutally honest with yourself and have no “sacred cows.” To accomplish that you need to have a culture that prides itself on execution. While it does make mistakes, WM has that culture.
Probably the best part of this strategy is that it is very simple and easy to communicate to their employees–or should I say…associates. The strength of any strategy is the ability to instill it in the organization and be able to execute it from top to bottom. It would appear that this should succeed for that very reason.
This is simplified Category Management. Each category has a role or mission to support the consumer’s shopping experience. Some are for bringing the customer into the store and others are to fill out their needs.
Some categories are growing and others are not; it is that simple. More advanced Category Management teams include interrelations among categories in the decision process. Every retailer should be doing the same thing with their target market.
We can’t argue that Walmart is on the ball when it comes to merch strategy. Optimizing the mix and layout to pump margins only makes sense.
Turns of products are going down so as merchants, we need to maximize sales and the basket. Focusing on higher margin items while still catering to the core customer’s needs is the way to go in this retail landscape. This strategy will help put emphasis on the house brand which they are revamping coincidentally.
The article says it all. It gives them the framework to be more efficient and effective. Easy to understand and easy to articulate, the program should be very successful.
The area not covered is the opportunity to move a product from show to play or win. How and when or why would you do that? It may be a missed opportunity!
Unless I am missing something, the nomenclature may be different, but the strategy behind this is not different than what has been industry standard practice for years now. Whether we refer to it as: “Signature,” “Destination,” “Routine,” “Convenience,” etc, or not, looking at what contribution and competitive positioning is provided by different product groupings is not exactly earth shattering, is it?
Terminology aside, it is the right thing to do in choosing where to invest resources and focus, and regardless of the lexicon chosen; deciding how to look at categories, products, or SKUs with a more strategic eye is a positive.
Whether it is merely a category management strategy or something a bit more sophisticated, we continue to witness Walmart’s ability to determine the value of categories and category entry focus to grow its business.
We seen this with food, then toys, and now major electronics. My guess is, major appliances aren’t too far around the corner….
The strategy (and don’t believe for a minute that it is a tactic) is a long-term and capital-intensive one.
Walmart’s “Win, Play and Show” strategy is underpinned by their commitment to remodel thousands of stores so that this new merchandising strategy may be presented properly. The new branding (Walmart*), the new retail format, which it plans to roll out nationwide, features wider aisles with lower fixtures and a greater field of vision, and store merchandising focused on Grocery, Health & Wellness, Home & Living and Outdoor living.
This strategy may play well far into the future and it pins its hopes on a customer base who wants clarity and reduction of selection, low prices and a clean & friendly place to shop. Initial takes are that the new store format and assortment rationalization is working. This is a bold move for Walmart’s core and traditional customer who liked Walmart’s eccentric merchandising, huge assortments and endless promotions on endcaps, in the aisles and at the checkouts.
It will be interesting to see how this strategy will play in times of plenty.
Again it is more PR then need. Wal-Mart is keeping their stores fresh but sticking to the true Wal-Mart merchandising strategy–win with price–and that means limited assortment. Remember, the first part of this statement was taking costs out of the system. Wal-Mart tried to go upscale and where did that go? Talk about new and exciting, throw some resources at it, and end up back at cost.
No, it’s not a strategy. It’s a tactic. “Win, Play and Show” is a label, a paste-on, a Band-Aid Brand Adhesive Bandage (which is a true strategy). In other words, ground-level, short-term, sales-influencing programs are classified as tactics. (Plus, “Win, Play and Show” is grammatically incorrect.)
Here are the definitions I give to my marketing students: Marketing objectives define desired (or necessary) business achievements precisely, numerically, and measurably. Strategies are the overall means to achieve marketing objectives, such as advertising, promotion, product expansion/improvement, or targeted programs (depending on the industry). Tactics are the tools used to implement strategies and achieve marketing objectives.
Clear as mud? Evidently so, since it’s endemic to marketing to mistake tactics as strategies and even as objectives. At the risk of being pedantic, I must reference Walmart’s (why do we continue to misspell their name?) RFID initiative which was heralded as a strategy. However, it was clearly a tactic to implement the strategy of increasing vendor commitment and involvement. This strategy, then, helps Walmart achieve its sales, profit, and growth objectives.
Why is the distinction between marketing objectives, strategies, and tactics so important? A major reason is that when we mislabel a tactic as a strategy we are less likely to abandon it if it shows signs of failing. It’s easy to change tactics, but less comfortable to walk away from strategies. So, companies support tactics as if they were strategies or even objectives, and suffer the consequences. All because they were unfamiliar with the marketing definitions and lost sight of their true marketing objectives.
When managing (from the agency side) Safeway’s national advertising campaign some years ago, Safeway’s corporate marketing VP asked me where the “children and puppies” were in our creative recommendation. He had read that commercials including children and puppies were the most attractive to viewers, and so that had become his marketing strategy and, perhaps, even his marketing objective. But, it was clearly a tactic and he didn’t even know it.
I agree with Frank Dell and others, that not only this is nothing new, but it is a strategy ALL retailers (of any type in any segment) should be executing…especially in today’s environment. It is great that WMT is getting tactical in its deployment. Everyone can learn from this that strategy is no good without execution.
Many retailers focus on various strategies to grow with growth categories. The difference in the Wal-Mart strategy is very telling about the Wal-Mart business. The strategy is not only “tied to each category’s growth potential,” most importantly it is tied to “Wal-Mart’s advantage of scale”.
Wal-Mart will not be investing in and promoting growth categories willy-nilly as many retailers do. There will be no growth category de jour for Wal-Mart. Wal-Mart will focus on categories that play to Wal-Mart’s advantage of scale so that the effort not only grows the top line but also the operating margin. These categories will be areas where Wal-Mart will be able to attain a market share of at least 30%. These categories will be categories where competitive retailers will always be on the financial short end of competing.
“Win” is certainly the right nomenclature for these categories and Wal-Mart’s approach, because competition will find competing in these categories with Wal-Mart detrimental to their financial position vis-à-vis Wal-Mart.
This seems pretty basic to me. As with everything Walmart does, the advantage will be in execution. In two ways:
1) They WILL execute the strategy with military precision. Other retailers might falter at the shelf.
2) They have the scale to push all their vendors to support the strategy (as in “give me more SKUs of X–and I have to be low priced”).
Wal-Mart has shown its ability to drive costs out of the system, highlight only the leading products in a category and build strong store brands. There is no reason to think that their current strategy will not also be a success. By focusing on categories that WM can control and drive margin, they are hoping to increase profit. This, in turn, will focus manufacturers on ways to help WM in this effort or be relegated to the “show” category.
I think win, play, show is one of the more brilliant ideas to come along in retail in quite some time. Much attention has been paid to the “win” and “play” categories (naturally, as this is where vendors and Walmart reap the biggest rewards); however, “show” is the designation that really makes the difference in my opinion.
As other retailers and direct competitors (Target) focus on relentless productivity, items with slower sales tend to get pushed out of the system. Nevertheless, some of those items are on shoppers’ lists! Walmart has figured out that they need to “show” these items or risk customers’ ditching without completing their mission. They also get it that broad and deep assortments in these items aren’t required in order to keep shoppers shopping. Walmart has once again managed to simplify messaging and understanding around a more-than-complex proposition. Other retailers are paying attention, spurring the creation of companies such as Dunhumby (www.dunhumby.com) and others which address retail’s long tail conundrums.
I totally agree. This is nothing new–only a dumbed-down version of category management simplified for the associates.
Who but Wal-Mart can so successfully execute the “Win, Play and Show” retail strategy? Nobody, at least not today, since only the Baron of Bentonville appeals to an increasing number of hard-pressed customers willing to accept logical, albeit Spartan merchandising.
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Walmart’s “Win, Play, Show” reminds me of the Boston Consulting Group’s growth-share matrix–the quadrant chart used to differentiate strategic business units as either “star,” “cash cow,” “question mark” or “dog.”
It’s a potentially useful piece of input for master store planning, an operational discipline that is glaringly lacking in our industry.
So I’m not impressed yet. I might be, if Walmart uses this process to better allocate department space and adjacency.
This sounds like standard category management with new names. Own the categories where you can differentiate, and milk them for all the margin you can. Identify the next set of categories with potential, and focus marketing/promotional dollars to move them up. For the rest, minimize investment knowing that they are necessary but will never directly contribute to margins.
The key here is effectively using analytics to correctly categorize the products, and identifying the right strategies for continued growth. To get this right takes a strong understanding of customer demand and its levers.
It’s a good strategy but nothing revolutionary. There have been several similar strategies over time such as “Grow; Nurture; Exploit,” etc.
I agree with David that the concept of dividing your categories into multiple segments has been around for some time. The WM terminology may be different, but the underlying concept is the same–what are the categories where you have an advantage, where you are competitive, and where you just want to do maintenance?
I also agree that in order to execute this strategy you need to be brutally honest with yourself and have no “sacred cows.” To accomplish that you need to have a culture that prides itself on execution. While it does make mistakes, WM has that culture.
Probably the best part of this strategy is that it is very simple and easy to communicate to their employees–or should I say…associates. The strength of any strategy is the ability to instill it in the organization and be able to execute it from top to bottom. It would appear that this should succeed for that very reason.
This is simplified Category Management. Each category has a role or mission to support the consumer’s shopping experience. Some are for bringing the customer into the store and others are to fill out their needs.
Some categories are growing and others are not; it is that simple. More advanced Category Management teams include interrelations among categories in the decision process. Every retailer should be doing the same thing with their target market.
We can’t argue that Walmart is on the ball when it comes to merch strategy. Optimizing the mix and layout to pump margins only makes sense.
Turns of products are going down so as merchants, we need to maximize sales and the basket. Focusing on higher margin items while still catering to the core customer’s needs is the way to go in this retail landscape. This strategy will help put emphasis on the house brand which they are revamping coincidentally.
The article says it all. It gives them the framework to be more efficient and effective. Easy to understand and easy to articulate, the program should be very successful.
The area not covered is the opportunity to move a product from show to play or win. How and when or why would you do that? It may be a missed opportunity!
Unless I am missing something, the nomenclature may be different, but the strategy behind this is not different than what has been industry standard practice for years now. Whether we refer to it as: “Signature,” “Destination,” “Routine,” “Convenience,” etc, or not, looking at what contribution and competitive positioning is provided by different product groupings is not exactly earth shattering, is it?
Terminology aside, it is the right thing to do in choosing where to invest resources and focus, and regardless of the lexicon chosen; deciding how to look at categories, products, or SKUs with a more strategic eye is a positive.
Whether it is merely a category management strategy or something a bit more sophisticated, we continue to witness Walmart’s ability to determine the value of categories and category entry focus to grow its business.
We seen this with food, then toys, and now major electronics. My guess is, major appliances aren’t too far around the corner….
The strategy (and don’t believe for a minute that it is a tactic) is a long-term and capital-intensive one.
Walmart’s “Win, Play and Show” strategy is underpinned by their commitment to remodel thousands of stores so that this new merchandising strategy may be presented properly. The new branding (Walmart*), the new retail format, which it plans to roll out nationwide, features wider aisles with lower fixtures and a greater field of vision, and store merchandising focused on Grocery, Health & Wellness, Home & Living and Outdoor living.
This strategy may play well far into the future and it pins its hopes on a customer base who wants clarity and reduction of selection, low prices and a clean & friendly place to shop. Initial takes are that the new store format and assortment rationalization is working. This is a bold move for Walmart’s core and traditional customer who liked Walmart’s eccentric merchandising, huge assortments and endless promotions on endcaps, in the aisles and at the checkouts.
It will be interesting to see how this strategy will play in times of plenty.
Again it is more PR then need. Wal-Mart is keeping their stores fresh but sticking to the true Wal-Mart merchandising strategy–win with price–and that means limited assortment. Remember, the first part of this statement was taking costs out of the system. Wal-Mart tried to go upscale and where did that go? Talk about new and exciting, throw some resources at it, and end up back at cost.
No, it’s not a strategy. It’s a tactic. “Win, Play and Show” is a label, a paste-on, a Band-Aid Brand Adhesive Bandage (which is a true strategy). In other words, ground-level, short-term, sales-influencing programs are classified as tactics. (Plus, “Win, Play and Show” is grammatically incorrect.)
Here are the definitions I give to my marketing students: Marketing objectives define desired (or necessary) business achievements precisely, numerically, and measurably. Strategies are the overall means to achieve marketing objectives, such as advertising, promotion, product expansion/improvement, or targeted programs (depending on the industry). Tactics are the tools used to implement strategies and achieve marketing objectives.
Clear as mud? Evidently so, since it’s endemic to marketing to mistake tactics as strategies and even as objectives. At the risk of being pedantic, I must reference Walmart’s (why do we continue to misspell their name?) RFID initiative which was heralded as a strategy. However, it was clearly a tactic to implement the strategy of increasing vendor commitment and involvement. This strategy, then, helps Walmart achieve its sales, profit, and growth objectives.
Why is the distinction between marketing objectives, strategies, and tactics so important? A major reason is that when we mislabel a tactic as a strategy we are less likely to abandon it if it shows signs of failing. It’s easy to change tactics, but less comfortable to walk away from strategies. So, companies support tactics as if they were strategies or even objectives, and suffer the consequences. All because they were unfamiliar with the marketing definitions and lost sight of their true marketing objectives.
When managing (from the agency side) Safeway’s national advertising campaign some years ago, Safeway’s corporate marketing VP asked me where the “children and puppies” were in our creative recommendation. He had read that commercials including children and puppies were the most attractive to viewers, and so that had become his marketing strategy and, perhaps, even his marketing objective. But, it was clearly a tactic and he didn’t even know it.
I agree with Frank Dell and others, that not only this is nothing new, but it is a strategy ALL retailers (of any type in any segment) should be executing…especially in today’s environment. It is great that WMT is getting tactical in its deployment. Everyone can learn from this that strategy is no good without execution.
Many retailers focus on various strategies to grow with growth categories. The difference in the Wal-Mart strategy is very telling about the Wal-Mart business. The strategy is not only “tied to each category’s growth potential,” most importantly it is tied to “Wal-Mart’s advantage of scale”.
Wal-Mart will not be investing in and promoting growth categories willy-nilly as many retailers do. There will be no growth category de jour for Wal-Mart. Wal-Mart will focus on categories that play to Wal-Mart’s advantage of scale so that the effort not only grows the top line but also the operating margin. These categories will be areas where Wal-Mart will be able to attain a market share of at least 30%. These categories will be categories where competitive retailers will always be on the financial short end of competing.
“Win” is certainly the right nomenclature for these categories and Wal-Mart’s approach, because competition will find competing in these categories with Wal-Mart detrimental to their financial position vis-à-vis Wal-Mart.
This seems pretty basic to me. As with everything Walmart does, the advantage will be in execution. In two ways:
1) They WILL execute the strategy with military precision. Other retailers might falter at the shelf.
2) They have the scale to push all their vendors to support the strategy (as in “give me more SKUs of X–and I have to be low priced”).
Wal-Mart has shown its ability to drive costs out of the system, highlight only the leading products in a category and build strong store brands. There is no reason to think that their current strategy will not also be a success. By focusing on categories that WM can control and drive margin, they are hoping to increase profit. This, in turn, will focus manufacturers on ways to help WM in this effort or be relegated to the “show” category.
I think win, play, show is one of the more brilliant ideas to come along in retail in quite some time. Much attention has been paid to the “win” and “play” categories (naturally, as this is where vendors and Walmart reap the biggest rewards); however, “show” is the designation that really makes the difference in my opinion.
As other retailers and direct competitors (Target) focus on relentless productivity, items with slower sales tend to get pushed out of the system. Nevertheless, some of those items are on shoppers’ lists! Walmart has figured out that they need to “show” these items or risk customers’ ditching without completing their mission. They also get it that broad and deep assortments in these items aren’t required in order to keep shoppers shopping. Walmart has once again managed to simplify messaging and understanding around a more-than-complex proposition. Other retailers are paying attention, spurring the creation of companies such as Dunhumby (www.dunhumby.com) and others which address retail’s long tail conundrums.
I totally agree. This is nothing new–only a dumbed-down version of category management simplified for the associates.
Who but Wal-Mart can so successfully execute the “Win, Play and Show” retail strategy? Nobody, at least not today, since only the Baron of Bentonville appeals to an increasing number of hard-pressed customers willing to accept logical, albeit Spartan merchandising.