Walmart is acquiring Volt Systems, a technology company that provides suppliers with enhanced on-demand visibility into merchandising resources.
Volt’s Engage system, which enables and facilitates vendor relationship management through access and visibility, appears to be Walmart’s main target.
In the release announcing the acquisition, Walmart noted, “Engage is a partner relationship management technology that qualifies, engages, and connects retailers with their vendor partners to optimize performance. The application delivers current store-level data, actionable analytics, and shelf intelligence for suppliers to plan, forecast, and optimize product assortment.
“As a result, customers receive a more seamless omni-shopping experience, with reduced friction due to out-of-stocks. The deal affirms Walmart’s continued investment in technology and innovation that enables us to better anticipate customer demand. We are acquiring Volt Systems outright, including the company, talent, technology, and customer agreements.”
See also: Walmart to Acquire Volt Systems, Bolster Supply Management
This is a case of the major retailer acquiring one of its vendors — Walmart is listed as a customer on Volt’s website, which also includes a use case apparently drawn from its acquirer.
“Like most retailers, a leading national retailer was utilizing a paper logbook at the front of the store for vendor reps to sign in and out for each visit providing low visibility to the activity occurring in their stores,” Volt said on its website. “They implemented the Engage platform in 2017 as a solution to gain visibility to the thousands of daily vendor visits to their stores and facilitate digital certification and security badging for all vendor provided visit activity.
“Over time the Engage solution has evolved to provide vendors access to the retailer’s systems and information to facilitate more effective and secure execution through one central application.”
This is an example how digitization can improve the flow of trade by capturing inventory data from the point of intake, creating operational efficiencies, including the automation of legacy, paper-based manual systems. In addition, the badging-and-tracking utility enhances in-store security.
The system also gives suppliers better visibility into Walmart’s inventory needs, facilitating efficient and effective trade flows. Thus, the acquisition is all about providing more transparency into the supply chain dynamics that often create delays that stymie the retailer’s omnichannel strategy.
Providing suppliers with greater visibility into inventory needs enables Walmart to seamlessly improve the two-way flow of information necessary to coordinate supplier sourcing and manufacturing with downstream in-store and online demand. The end goal is to use real-time data to move merchandise and payments at the pace of cyberspace.
Improving Productivity
Employing systems such as Engage enables companies like Walmart to redeploy human resources, ensuring capital is deployed to its highest, best use.
As PYMNTS observed recently, while Walmart announced a relatively de minimis 200 employee reduction in force, it reflects an ongoing focus on cost reduction as well as the continuation of the giant retailer’s digital transformation.
Read more: Walmart Cuts Jobs at Corporate, Braces for Sales Slowdown
Walmart’s Director of Global Communications Jimmy Carter told PYMNTS in a telephone interview and emailed statement, “We’re updating our structure and evolving select roles to provide clarity and better position the company for a strong future,” noting plans to further invest in key growth areas such as eCommerce and technology.
Walmart has been investing heavily in the digital arena for years, primarily in response to share battles with Amazon.
Make, Hire or Buy
The Volt deal is reminiscent of Silicon Valley acquisitions done primarily to acquire talent. As PYMNTS has reported, Walmart has nearly 59,000 open positions, and rock star technical talent is in particularly short supply — often necessitating buying it, rather than hiring it.
Volt is also a case study of 21st century “make or buy” decision making. Rather than attempting to write its own software solution, Walmart has decided to exclusively capture the benefits of a system it has been using for seven years and avoid the delays and expense of writing its own code internally or outsourcing the task to consultants.
Given the urgency of digital transformation on the B2B domain, simply buying a proven solution which has already undergone the daunting systems integration process can expedite companies’ march toward a digital destiny.
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