RETAIL DISTRIBUTION STRATEGIES

Retail Distribution Channels are the

paths goods and services take to reach
the consumer from a vendor. These
paths can be short, direct distribution
channels from the vendor straight to
the consumer.

Retail distribution strategies deal with

how many and what kind of vendors
companies use to get their products to
consumers. In general, there are three
basic retail distribution strategies
 Walmart
Walmart is unarguably the largest and leading retailer in the
global retail industry with the net sales of $555.2 billion in the
financial year ending 2021. The success of the company is based
on various elements and strategies, and the effectiveness can
simply be noted from the fact that it serves nearly 250 million
customers every week, managing and operating over 1050 retail
stores across the world in over 26 countries with more than 71
brand identities and corporate banners

However, the most important yet interesting fact about the

Walmart is defined as its supply chain and distribution strategy
which is also considered as the industry benchmark. The main
reason is the fact there is no other corporate player in the global
marketplace owning the similar size of business portfolio and
along with such diversified market existence. It is also revealed
from the research studies that the place and distribution strategy
that is designed and executed by Walmart is not only the key to
its success, but also a source of its competitive advantage.
 Walmart’s Distribution Strategy
Walmart’s distribution strategy is extensive and spans a wide range of areas. It follows a business model of
lowering or cutting down the costs out of supply chains. The ultimate goal here is to help its consumers or
customers to save money.

The sheer size of its operations has drawn the interest of individuals and institutions to gain an insight into
how things (especially its distribution strategy) are organized. It all started with the goal of meeting the needs
of clients by providing them with the products they wanted.

Such goods reached the customers whenever and wherever they wanted them. Walmart moved further to add
cost structures which were meant to create lower pricing for all of its services. Walmart’s next line of action
was to create an enhanced supply chain management structure.

The result of these strategies has helped a great deal in positioning the company as a market leader .
Fewer supply chain Links
One of Walmart’s distribution strategies has to do with the creation of fewer supply chain links. This has been
effective in enhancing efficiency while significantly lowering its distribution costs.

So, what exactly does fewer supply chain links mean?

Right from its early days as a growing company, Walmart removed some of its supply chain links. This meant that
Walmart began working directly with product manufacturers which in turn helped cut costs significantly. This
drastically improved the efficiency of supply chain management.

Part of its distribution strategy was the unveiling of its Vendor Managed Inventory (VMI) program. Under this
program, rather than Walmart managing its inventory, this responsibility is transferred to product manufacturers.
This is done in Walmart’s warehouse.

This distribution strategy has seen Walmart continuously achieve close to 100% order fulfillment on merchandise
delivery. What more? It has also resulted in lower distribution costs.
 Streamlined Operations

Another Walmart strategy that has ensured it continues to meet and fulfill client
expectations is its streamlined operations. This is seen in its partnerships with strategic
partners (including product suppliers and vendors).

Some of the benefits obtained from these partnerships are strategic sourcing (from
suppliers) as well as improved material flow with lower inventories using its network of
global retail stores, warehouse, and suppliers.

That way, goods are easily distributed with minimal difficulties.

Walmart’s Supply Chain
Walmart’s Supply Chain Problems

One of the main supply chain problems resulted from certain merchandise being returned to the
shelves after attempts to de-clutter its stores. This was a restocking problem that had to be fixed.
Being unable to adequately replenish supplies to keep up with customer demands hampered its
operations significantly.

Another problem resulting from the inability to replace supplies after the last ones have been shipped
out is gaps where merchandise is missing. A major supply chain problem confronting Walmart is delay
restocking.

When items are purchased from Walmart and are shipped out, there needs to be a replacement or
replenishment. Anything less than this leads to a problem as customers are unable to find what they
seek. This is a major supply chain problem confronting Walmart that needs to be resolved.
IN Conclusion

Walmart is a global giant when it comes to retail and e-commerce among other things.
This company has continued to expand its operations into new territories.

However, we’ve also seen that such successes come with their own challenges.

For growing businesses, this insight is crucial to ensuring that operational structures
are well laid and frequently modified to meet up with emerging trends and demands.
It is also important to identify areas that need improvement and halt unproductive
distribution or supply chain strategies.
THANKYOU.