Originally created 09/22/03

Wal-Mart counts on category chiefs to help it grow business

ROGERS, Ark. -- When executives at Swisher International Inc. learned that chocolate- and strawberry-scented cigars had become popular on the East Coast, they quickly passed the word to Wal-Mart Stores Inc.

And when regional brands like Travis Club and 1886 started catching on, the same executives again informed the world's largest retailer.

But those cigars weren't part of Swisher's repertoire of labels - they came from its rivals.

"Our job is to alert them to hot trends, and products, even if they're not from our company," said Hank Harris, national account manager of Swisher, the nation's no. 2 cigar maker behind Altadis.

Swisher belongs to an elite group of vendors that Wal-Mart has picked as so-called category advisers. In return for the prestige and influence of that position, the companies often act in ways that, at first blush, don't seem in their own interest at all.

In an indication of Wal-Mart's vast clout, and the importance it places on sharing market information, it has no problem recruiting hundreds of the advisers and charging them with responsibilities that can run counter to their own short-term sales goals.

They are asked to advise Wal-Mart on which goods to dump and which to expand, to spot new hot trends and brands, and to recommend how to display merchandise - even if that means a big sales boost for their competitors.

"It hasn't helped Swisher per se ... It has helped Wal-Mart," Harris concedes. "But it gives us the opportunity to work with the world's largest retailer,"

In fact Harris acknowledges that Swisher's sales have suffered a bit as his three-person team, based in Rogers near Wal-Mart's headquarters, has focused on managing Wal-Mart's cigar and loose leaf tobacco division.

Nevertheless, this a job that many vendors covet, and Harris said that in the long run, the company's business will only grow as Wal-Mart expands. "It is a sense of pride, an honor," he said.

Wal-Mart's use of category advisers offers a window on its somewhat unique approach to success, which involves capitalizings on its vendors' own expertise.

It's far different from the common industry practice that has retailers using vendors' staffs to manage the areas where their own products are sold.

Melissa Berryhill, a Wal-Mart spokeswoman, declined to comment on the program, saying it doesn't discuss its relationship with any of its suppliers, which number more than 20,000. But industry experts have closely watched Wal-Mart develop its special relationships with some vendors.

The use of category advisers began with pet food maker Ralston Purina in 1991 and has expanded to include many product areas.

To do the job, Wal-Mart grants the category adviser team access to data about the sales of their rivals, broken down by brand and region of the country. But the advisers are barred from sharing that information with their own companies' sales teams.

The Swisher team is based in Rogers, just down the road from Wal-Mart's headquarters in Bentonville and far from Swisher's own sales operations in Jacksonville, Fla. Harris declined to offer any sales figures on Wal-Mart's cigar business, or how much Swisher has helped the business.

The team tours stores and analyses market data, but new ways to boost sales don't always have to be complicated.

Recently, Swisher advised Wal-Mart to carry more individual packs of 50 cigars instead of packs of five.

"Consumers are simply not going to stand in line at a Wal-Mart or Sam's Club simply for a small quantity," Harris said.


Trending this week:


© 2017. All Rights Reserved.    | Contact Us