In 2011, Walmart made the bold statement that it would use its cash to promote gender equality. Internationally, the retail giant committed to doubling its sourcing from female suppliers, and in the U.S., it said it would buy $20 billion in products from female-owned U.S. businesses by 2016.
At the time, I was suspicious of the company’s committment–the announcement came quickly after a class action sex discrimination suit against Walmart (though it was thrown out by the Supreme Court). But, at least so far, the reality on the ground is promising.
To help fulfill these goals, Walmart launched in March an online marketplace specifically for women-owned businesses. The platform, Empowering Women Together, features a growing array of products, ranging from dresses to chocolate to paper mache vases.
Walmart has some strict criteria for the businesses: They have to be 51% owned and operated on a day to day basis by at least one woman, and they have to make less than $10 million in annual revenue. That’s a fairly large number, but Walmart is ultimately hoping to lift up smaller suppliers.
“When we launched, it was a bit more strategic in that we didn’t necessarily have a portal of women saying ‘I want to sell to you.’ We had to go see who was out there,” says MiKaela Wardlaw Lemmon, Senior Director of Women’s Economic Empowerment at Walmart. That meant dealing with some unexpected challenges.
In more remote parts of the world, the infrastructure (like roads) isn’t advanced enough to handle third-party logistics carriers like UPS that would normally deliver products. So Walmart teamed up with aggregator partners on the ground that take care of thorny logistics issues, ensuring that local products are combined into single shipments, taken to a port, and sent overseas. “The whole challenge of supply chain was not quite as obvious when we first started the process. We didn’t initially say ‘We need aggregator partners.’ That was one of the early learnings–that we couldn’t do it all ourselves,” explains Lemmon.
Walmart has signed on businesses all over the world. In Rwanda, a group of women are selling dresses via Full Circle Exchange on Walmart’s platform. In Nepal, a small company called Friends Handicrafts is producing handmade iPad cases for the site.
Walmart helps these small businesses figure out which of their products are most appealing to its customers, and which may not work. In the case of the dresses coming from Rwanda, “they were great technically speaking, but the length and patterns weren’t necessarily what we thought would make sense,” says Lemmon. Walmart offered tips on how the dresses should be tweaked, and now they’re some of the top sellers on the site.
Over half of the suppliers on the Empowering Women Together platform come from the U.S. The Women’s Bean Project, a Denver organization that hires poor women (95% are felons) to produce soups and other products, is an example. The group is an ideal supplier for Walmart: With $1.7 million in product sales annually, 30 different food products, and a line of jewelry, the business is small but not too small. And the company already sells its products in 500 stores throughout the U.S., including 100 Safeway stores in the Denver metro area–proof that it knows how to scale up.
“We’ve grown our distribution to where we could handle a relationship like working with Walmart,” says Tamra Ryan, CEO of the Women’s Bean Project.
Still, she admits, there’s an element of nervous excitement to working with such a large company. “You want the business and then you kind of are afraid of the business, maybe. I’ve been joking that we only want a small percentage of Walmart.com customers, because that alone would transform the organization.”
The Women’s Bean Project has 32 women on payroll at any given time. If sales continue to grow, Ryan hopes to double in size over the next three years. Walmart could be a big part of that growth.
For now, most products from the Empowering Women Together suppliers are only available online. That may change. ComfortCake, a company started by Chicago entrepreneur Amy Hilliard, has already made the transition to selling its Luscious Lemon Gourmet Pound Cake Mix in physical Walmart stores.
“We have the ability to understand current capacity and future capacity. Some [entrepreneurs] like Amy might start selling on Walmart.com–let’s say 500 to 1,000 pieces–and if she’s able to increase orders, we can figure out the right timing to get into stores,” explains Lemmon. Hilliard’s pound cakes are known in the Chicago area, so it makes sense to stock them in nearby Walmart stores, and in other stores where pound cake is a big seller. “There’s a lot of intel we can use to set them up for success,” says Lemmon.
Check out the Empowering Women Together platform here. The majority of products from the initial round of suppliers will be available by October 1st.