'Retailers must innovate to take on Wal-Mart'

"Retail giant Wal-Mart's entry into any country witnesses rules being re-written and changed. They also rock prices, making the market competitive," said John C Williams, senior partner, J C Williams Group, a global retail consultant.

Addressing a meet on 'Get Ready for Wal-Mart: How to Thrive in the New Global Retail Scene', organised by Ramms, a Bangalore based retail consultant, and J C Williams, he said: "Scale, scope and speed have been Wal-Mart's growth engine and also it works differently from other retailers."

"Wherever Wal-Mart operates, prices are lower by 13% to 15%, and this is done by controlling cost through the supply chain, right from the manufacturer's shop floor to the store," he added. Wal-Mart thoroughly depends on manufacturers.

As per their business plan, manufacturers need to discipline themselves and work to the guidelines set by the company.

"Wal-Mart does not entertain any manufacturer or supplier without goods being barcoded and packed as per their specifications. The company also helps and imparts suppliers the knowledge of packaging and shipping to cut down costs to be profitable," he said.

Talking of the kind of footfalls the retail major attracts, Williams, said, "This year they are expecting 7.2 billion visitors to Wal-Mart stores. The earth's population is 6.4 billion!"

John Torella, senior partner at J C Williams Group-USA talking on 'Private branding: The new power in retail', said: "Companies or retailers should address and drive innovation in their organisations to take on competition from Wal-Mart.

Some retailers in the US and Canada in the last five years have resorted to this to take Wal-Mart head on and have succeeded."

"Innovation leads to a love affair with private labels. This differentiates the chain in the crowd, enhances the corporate brand and this in turn drives profitability," he added.

Giving examples of how innovation is driving companies, Torella said, "Target in the US is surviving due to the innovation culture driven right from the CEO's table to the counter salesman. Tesco has mastered the art of customer relations and is picking customer insights, and J C Penny has roped in well-known brands and designers to create private labels and has been creating events around them to draw footfalls."