U.S. Sourcing

Published on April 10, 2017 and last updated on August 02, 2019

In 2011, the WEE Initiative started with a vision to achieve $20 billion in spending with women-owned businesses (WOBs) for our U.S. businesses over five years.
Women's economic empowerment

In 2011, the WEE Initiative started with a vision to achieve $20 billion in spending with women-owned businesses (WOBs) for our U.S. businesses over five years.

We have surpassed that goal achieving $21.2 billion through January 2017. In the five years of the initiative, we have learned a lot. Based on the Walmart WEE team's experience, we outline the following practices and resources for consideration by those interested in building a WOB sourcing program in their U.S. business. We continue to strive to focus on diversity and inclusion across our business, utilizing shared value and driving empowerment for diverse communities.

What we did:

  • Step 1: Start the Process
    Set up a working infrastructure and understand barriers faced by women-owned businesses.

    Set Up Infrastructure: Create a dedicated team and budget to build the strategy and execute the goals, with support from senior leadership.
    • Create a steering committee of senior leadership to advise and advocate. Keep them informed with frequent progress reports.
    • Create a Women-Owned Business Advisory Council (WOBAC) of existing WOB suppliers and key leaders within the business to problem solve challenges facing WOBs.
    • Form working groups to execute solutions.

    Run Diagnostics: Create a spending goal for the initiative and identify obstacles.
    • Assess current state of WOB sourcing, identifying barriers and opportunities, including funding, training and resources.
    • Analyze performance of existing WOB suppliers, identifying which are growing and which are declining in sales.
    • Determine gaps in product lineup and set goals for spending with WOBs.
  • Step 2: Cultivate Champions
    Gain the support of leadership and cross-functional teams.

    Gain leadership support: Provide a compelling business case and demonstrate societal impact to drive support.
    • Align with company strategy and priorities.
    • Build the business case using financials to show why supporting WOBs is good for business.
    • Communicate with broader company on the importance of buying from small, diverse businesses, including WOBs.
    Align with cross-functional teams: Work with different parts of the business to drive progress.
    • Partner with different teams across the business, e.g.
      • Corporate Affairs
        • Public Affairs
        • Federal Government Relations
        • Women’s Economic Empowerment
        • Corporate Communications
        • International Corporate Affairs
        • Supplier Diversity
      • Information Systems Division
      • Marketing
      • Supplier Administration Services
      • Global Sourcing
      • Merchandising
      • Procurement
    • Share strategies for working with WOBs.
    • Create reports and tools that track and monitor progress.
    • Provide opportunities through training, events and videos to educate employees about the initiative.
    • Use third-party vendors to support work beyond the scope of internal teams.
    Reward and celebrate: Celebrate and communicate success stories to build internal support.
  • Step 3: Grow Pipeline of WOB Suppliers
    Identify potential WOB suppliers and find opportunities to increase sourcing from existing WOBs.

    Find and vet viable WOBs: Participate in and organize events for qualified WOBs.
    Build supplier capacity: Develop tools and training to help WOBs improve their ability to supply large corporations.
    Support access to capital: Determine ways in which the business can help WOBs overcome the financing challenges they often face.
    Emily Gottschalk Quote
  • Step 4: Provide Internal Support
    Establish partnerships with buyers to help them increase business with WOB suppliers.

    Support buyers: Provide tools and training to make it easier for buyers to work with WOBs.
    • Align with business strategy. Find ways to source from WOBs that complement business goals.
    • Remove additional work from buyers by providing training to WOBs and make onboarding smoother.
    • Develop supplier relationships and act as a resource to WOBs, assisting with questions or other needs.

    Develop tools and resources: Minimize time burden for buyers with simple tools. Video: Walmart's Approach to tools
    • Provide tools that indicate which suppliers qualify as WOBs and provide data on performance.
    • Establish goals for growth of WOB sourcing using historical trends, business strategy and rate of change in status for WOB suppliers.
    • Develop visibility into performance of WOB vs non-WOB suppliers on a macro level.

    Embed into business process: Make support of WOBs part of the culture.
    • Add diversity status into existing tools to increase visibility
    • Participate in development of new tools, including supplier selection tools, strategic documents and annual reviews, ensuring WOB sourcing is included.
    • Prioritize business results and needs. Integrate work into normal process and performance expectations.
  • Step 5: Build Relationships
    Communicate with WOBs and other stakeholders to build and sustain engagement.

    Increase exposure: Communicate with WOB suppliers and stakeholders.
    Supplier visibility: Find opportunities to promote women-owned products.
    Create a movement: Use influence to encourage others to join you.
    • Collaborate with other businesses on challenges and solutions.
    • Join and fund women’s organizations.
    • Ask your suppliers to join in your efforts.

Outcomes

Overall results
In 2011, we set a goal of spending $20 billion with WOBs for our U.S. business. Annual purchases (spend) with WOBs were higher than our goal, allowing us to achieve $21.2 billion in spend from fiscal years 2013 (Feb. 1, 2012-Jan. 31, 2013) to 2017 (Feb. 1, 2016-Jan. 31-2017).

Composition by industry

  • In Walmart’s fiscal year 2017 (FY17), product suppliers (as opposed to service suppliers) made up 74% of our tracked purchases and spend with WOBs. The other 26% of spending was through service providers, such as marketing and real estate services.
  • Of the product suppliers, WOBs were heavily concentrated in the following areas of our stores: meat, fresh food, ladies apparel and home décor.

WOB size and composition

  • Sales are highly concentrated. In Walmart’s FY17, just 12% of our WOB suppliers accounted for 80% of our total WOB sales.
  • Two-thirds of the WOBs we work with have less than $1 million in annual sales with Walmart. The number of WOB suppliers with sales of more than $1 million per year increased from 190 in FY13 to 248 in FY17.

Where the growth came from

  • We divided our women-owned business into three segments: top 50, new business, and other. While we predicted that most of the growth would come from the top 50 WOBs, all of the segments grew at a rate of about 5%.

Sustainability of WOB spend

  • Often, successful WOBs undergo a change in status as the businesses go public or are purchased outright. While that may be good news for the women owners, it means we can no longer count sales from these businesses in our WOB total. Over the five years of the project, companies that were once classified as WOBs accounted for $700 million in purchases from Walmart that were not included in our total.

  • Between FY13 and FY17, we were able to maintain business with 90% of the new WOB suppliers we brought on.

  • Of the WOB suppliers that were working with Walmart between FY13 and FY17, 83% either held steady or saw growth in their annual Walmart purchase orders.

Lessons Learned

  • Leadership buy-in is crucial to obtaining resources and company alignment.
  • Establish a realistic timeline to achieve your goal. Build a strong strategy, but be agile and willing to adapt.
  • Partner with third-party organizations and key stakeholders to find new WOBs, amplify impact and provide resources to WOBs.
  • Engage the hearts and minds of the buyers and others critical to carrying out the work. Develop the necessary tools and resources to enable their success.
  • Women-Owned status has complexities and can change unexpectedly. Loss of suppliers due to change in status is a larger issue than we had anticipated.

Join us in a collective public commitment!

Walmart joins eight other companies in public sourcing commitment.

Women’s Business Enterprise National Council Collective Spend Information

On March 29, 2017 Walmart announced a collaborative effort with eight other companies to track and report sourcing from self-identified and certified women-owned businesses (WOBs) over the next five years. This marks the first time the Women’s Business Enterprise National Council (WBENC), the largest third-party certifier of businesses owned, controlled and operated by women in the U.S., will launch a formal initiative to publicly report aggregated spending on WOBs. Walmart helped form this unified front of major corporations which includes Campbell Soup, The Coca-Cola Company, ExxonMobil, General Mills, Johnson & Johnson, Mondelēz International, PepsiCo and Procter & Gamble, in order to create a more visible movement and raise awareness for the importance of sourcing from women-owned businesses.

Additional Resources