Inside Walmart's Marketplace Platform Strategy with Walmart Execs Latriece Watkins & Michael Mosser

Foreign.

Please welcome to the stage CEO of Omni Talk, Chris Walton, Chief Merchandising Officer, Walmart US Latrice Watkins and Vice President, Walmart Marketplace category lead, Walmart U.S. michael Mosser.

Right, thank you.

It's great to be here in San Diego at the Marketplace Seller Summit and even better to be doing this episode of omnitalk in front of a live audience.

So thank you to all of you, all 2,000 of you in the audience for being a part of it.

Looks like they got the studio set up here pretty quickly.

My guests are ready to go, so let's get started with the live podcast.

Sounds great.

Okay.

Welcome to omnitalk.

Today we have a unique episode and something we've never done before.

We're in San Diego at Walmart's Marketplace Seller Summit in front of a live audience.

Can you all cheer out there so my listeners know I'm not making this up?

All right, that was better than I expected.

All right, well, today we're going to tackle one of the most critical and sometimes most complex topics in retail and that is, of course, assortment.

It's what defines your brand.

It's what drives your conversion and determines whether you win or lose with the customer.

And let's be honest, no one does assortment at scale quite like Walmart.

Got a half billion items online to carefully curated shelves in over 4,600 stores.

This team has been rewriting the playbook for how physical and digital assortments can work together.

So I've got two amazing guests to help us unpack it at all.

Unpack it all.

Excuse me.

So without further ado, first, I imagine most of you know her, but she leads merchandising for Walmart us.

That means she's at the helm of everything from assortment strategy to supplier innovation, with a deep focus on delivering for the customer.

So let's give it up for Walmart's chief Merchandising officer, Latrice Watkins.

Good morning.

All right.

And joining her next to her is someone who's shaping how Walmart's marketplace is growing and evolving.

He's also laser focused on how sellers can win with market with smarter assortments, better tools and data backed decisions.

He's the VP of Category, VP of category for Walmart Marketplace, Michael Mosser.

Michael, welcome.

Thank you.

All right, Latrice, let's start off with this.

I heard through the grapevine that when you were a young child, you wanted to be a personal shopper.

Is that true?

Well, at some point I wanted to be a personal shopper first.

I wanted to Be a cashier.

Let's just face it.

I don't know.

When I went to stores as a young girl, the cashiers were fascinating, mostly because they put the numbers in the cash register so fast.

So I would pretend at home that I had a cash register.

It was really just a calculator.

But that probably was the start of my love for retail.

The cashier.

And then over time, I like buying stuff, and I like, help helping other people buy stuff.

So personal shopping became one of my passions, and I think maybe I found my calling.

I think the US Merchandising team's America's personal shoppers.

Yeah, in a way, you're the personal shopper for all of America.

That's what I think about it.

It's pretty crazy.

Michael, did you have similar merchandising and retailing dreams as a young lad?

You know, I don't know that I had that specific thought as a child, but I have always loved retail and shopping, and I spent a lot of time at the moment as a kid growing up.

And over the years, I remember serving as my friend's personal shopper here and there.

So maybe not a childhood dream, but I guess it shouldn't be a surprise that it all led me here.

Yeah, right.

Okay.

All right, well, let's get to the interview now.

So, Latrice, you've got a.

Like we said, you.

I mean, personal shopper for all of Walmart.

I was saying that kind of as a joke.

America, really true.

All of America.

Right.

So take a step back and all of Walmart.

Can you explain to us how you think about Omnichannel Assortment?

Sure.

I think maybe I'll start at the beginning.

I think first, I'd say it's our legacy.

And we got that from our founder, Sam Walton.

He thought all of us should be item merchants, thinking about what customers want and getting it in front of them.

I think second, I would say it matters that you have the assortment, but as much as it matters that you have it, it matters how fast you can get it to customers.

So I think second, I'd say, is speed.

It's about the fact that customers want things at the pace of their life, not ours.

And so stores that we buy merchandise for as well as one P assortment are a critical part of that.

And customers are close to our stores in most cases, so they can come to us and we can go to them.

And increasingly, we can go to them a lot faster.

So by the end of the year, we'll be able to get to 95% of the US population with same day delivery and ready.

Yeah.

A third of the deliveries from stores in recent weeks were in three hours or less.

Wow.

A third.

Yep.

And.

And 20% of those deliveries arrived to customers in 30 minutes or less.

That's incredible.

I know.

That's incredible.

I mean, I had no idea about that.

I know.

You didn't know.

No, I didn't know.

Who knew?

Who knew?

We knew.

I knew you knew.

It's your job to know.

I know.

Now all of you know.

And then.

So maybe I'll say the third question.

Yeah.

Get back to.

It's part of the question.

So there's speed and then there's the actual assortment, having the things that customers want.

And we think about it in a few different ways.

There is the store assortment, which is closest to the customer, the highest volume items.

And then we also have our 1P assortment in FCS along with some of the extended assortment in stores.

So the FC assortment comes from what we buy and from sellers who sign up for Walmart fulfillment services.

The benefit of that is it works through our whole network.

It gets all the advantages of the network we have.

So it's why Walmart fulfillment services are so important.

And then third is the marketplace.

The assortment that all of you have that helps extend the assortment, helps us give customers more of what they want when they want it.

Because we have the offering and we're able to put it in front of them.

All three of them are critical.

And it's what makes Walmart special.

The ability to have a mix of products that are really close to customers, that are extended in our fulfillment centers, that have the speed of our fulfillment services and marketplace sellers, that extend the assortment and give us the ability to give customers all the things they want.

So, Latrice, let me ask you.

So, like, the word platform gets thrown around in our industry a lot, so sometimes too much.

But the way you're describing it, I really think there's a platform play here.

Why do you think that platform is so unique to Walmart and so important for sellers?

I think it's unique because it gives sellers so many ways to grow.

So obviously we're at the seller summit.

We want to start with you selling with us.

But maybe if I give you an example that would help paint the picture.

There's a supplier in 2021 that joined us through Marketplace named Dreo.

Dreo is probably here somewhere.

They sell fans, heaters, and humidifiers.

The most important thing they did is they agreed to sell it with us.

Second, they gave us their Full assortment.

When we signed them up for Marketplace and then worked with our teams to build an incredible brand presence, well, you know what customers did?

They saw it, and they overwhelmingly responded to Dreo.

And so much so that there are six of their items that customers wanted more frequently and had a lot of demand.

And so those six items are also on shelves in stores.

So we give people the opportunity, or companies or customers or sellers the opportunity to sign up with us, start in one starting place and grow on that platform alone.

If you want, secondarily, you can expand that assortment into stores, and we can give sellers the opportunity to sell.

However customers want to buy their products.

That's the unique part.

Go ahead, Michael.

Dreo is a great example, and going from Marketplace to stores is certainly one path for sellers.

We've also seen store suppliers realize the benefits of our marketplace and bring their full assortment online.

Think of Marketplace as an endless aisle full of more colors and styles and sizes and packaging options, all compelling choices for customers that we just don't have room for in our stores.

We only have so much shelf space.

Right.

But digitally, we have an endless aisle.

Think, for example, the Levi's I'm wearing today I bought on the Marketplace.

Yeah, those are nice.

Yes.

Oh, look at that.

And the jacket.

Nice jacket, too.

Yeah.

So, you know, and Levi's started with their assortment in our stores, and they expanded with a much broader assortment and even brand extensions on our Marketplace.

And Manish mentioned dog sauce earlier.

They were one of the last year's open call winners.

They're now in 1200 stores and offer an expanded assortment online.

So these are just two of many brands that have taken this omnichannel approach to selling with Walmart.

Yeah.

And I think it's maybe important to note that we talked about how many stores we have.

We're also local, and you don't have to go to every single store if you get into stores.

And so it shouldn't be a barrier to think, if I can't go to all Walmart stores, I can't go to any stores.

We want to be as close to the customer that wants the product as possible.

And so we have the ability, another advantage of Walmart, to be small and local as well as big and national.

Yeah.

And imagine you want to partner with the brands on the smart rollout of their products and stores, because you're right, it's not easy to go to 400, 4600 stores overnight.

All right, Michael, because you mentioned brands, one of the things that caught my eye as Ann, my Business partner and I were doing our weekly podcasts every week was the partnerships with companies like Rebag and Stockx.

Like that's a big departure for what we traditionally think of for Walmart.

So how has the customer been receiving those types of initiatives?

Yeah, the response has been fantastic.

Those product categories are super, super fun to shop.

It's hard not to get obsessed with them.

We got started with those great partners as we saw customers coming to Walmart and searching for brands that Stockx and Rebag carry like Nike and Louis Vuitton.

And just last week we shared in our earnings report that our fastest growing customer segment is among high income earners.

So this expanded assortment has really resonated with them.

With this broader selection we're also reaching enthusiasts of all kinds searching for those coveted must have items.

We're also enhancing this enthusiast customer experience by introducing new initiatives in areas like collectibles.

So thinking like comic books or trading cards or coins or action figures.

This fall we're hosting live streaming events and exciting live breaks of trading card packs.

We're also continuing to offer pre orders as well.

So this allows customers to secure new releases on trading cards up to a month in advance.

So we're delivering on selection, trust and experience backed by fast fulfillment.

And we're just getting started Chris.

Just getting started.

Yeah, I mean you showed the numbers earlier like those numbers were pretty wild.

So I mean the question that comes from me or comes to my mind is what's next?

Like how do you think about what's next?

So you've done all that now but what's the one to three year plan look like in terms of how you're looking at marketplace and still trying to grow it?

Yeah, you know the number of items on our marketplace continues to grow rapidly.

We're now over a half a billion SKUs.

But more important than the number, we're really focused on responsible and strategic assortment growth.

We're going to continue to prioritize quality, integrity and customer relevance.

And fast fulfillment of this assortment is also critical as we've been discussing as customers are far more likely to complete their purchase when they see fulfilled by Walmart or 2day or better ship speeds.

So continually meeting this cultural, seasonal and category specific demand with a broad assortment is especially vital during peak seasons allowing us to capture shoppers attention precisely when it matters.

So looking ahead, you know, we're focused on more innovation, high quality, unique and even local favorite products.

With this focus we're going to continue to strengthen the integrity of the marketplace and bring the full spectrum of assortment that our customers are shopping for.

That's cool.

I've always said marketplace is a great way to tailor.

To tailor your assortment at the local level.

So that's really cool to hear.

All right, Letrice, I would lose my Punnet card if I didn't ask you this next question.

What's the.

What's the merchandising approach around AI?

Oh, so good.

Well, a few ways.

The first is we're using it to add to our assortment so we can have used the data that describes all the things customers buy in the places they buy it.

And we're using AI to search those items, identify them, and place orders to suppliers.

It's that simple.

And they're filling them.

The second one is the catalog.

And I think that would be important to this group here because it helps us keep our data up to date.

It makes sure that we have the product descriptions, attributes, and all of the information about the product, including imagery, available.

And it's time intensive and maybe not as much fun to do all of that.

So we've developed a tool with AI that helps both our suppliers and sellers do that.

And then the third area that we focused on for Wally is helping enable our merchants.

It is a tool that helps our merchants analyze and sort data faster than they ever could before, so in seconds instead of hours and days.

And it helps them also spot trends like what schools should have a certain sport.

I mean, what stores should have a certain sporting merchandise.

So professional teams or colleges.

So it's been a game changer for our team all around, Whether it's for support of our suppliers or sellers, or supporting the merchandising team and supporting customers about helping us find more things we can order from suppliers.

It makes me want to be a merchant again, you know, in a lot of ways.

Another thing that makes me want to be a merchant again, too.

And we'll get you out of here on this is, you know, the super bowl of retail.

It's right around the corner, the holiday season.

Are you guys ready for it?

Listen, when you first said it, I was like, we are ready.

But I'm not sure it's appropriate here.

But that's how I feel.

I get it's appropriate.

We're ready right now.

I feel we are ready.

We start.

We started holiday planning a year in advance.

Obviously, we were just.

With all of our store managers and facility managers across stores and supply chain, we're ready.

We've got great items, we've got great prices.

It's going to come to life in such a meaningful way.

So I'm really excited about what we're doing for holiday.

Yeah.

So I've worked in retail for a long time, and so I have an idea.

So this is kind of last question I wanna leave you guys with.

So I have an idea of what are the biggest categories in retail generally during the holiday season, But I'm curious how Marketplace changes that.

So what do you both see as the most important categories for the holiday season?

Yeah, so we're seeing customers shopping with us on shopping missions, but we're seeing great assortment in toys, electronics, fashion, home categories.

So as the customers are coming, as they're whether it's getting holiday ready or whether it's coming and finding that perfect gift, that unique gift that customers are looking for, we're bringing all of that assortment on.

So have customers have that full breadth of support.

Election.

Got it.

Maybe some tires, too, if you need them for the holiday season.

Got to get those winter tires.

That's right.

Exactly.

Tires as the season.

We do seasons here.

You need tires as the season change or meal planning changes.

If you need tires, you got to have tires, Right?

All right, on that note, thank you everyone in the audience for sticking with us.

As I say at the end of all of our podcasts, as always, be careful out there.

Thank you.