Walmart is undeniably one of the most notable retail giants in America. It holds its place as the largest store in the world – 2.2 million employees, and an enterprise with one of the heftiest annual revenues globally.
Given that it’s the most frequented department store in the US, Walmart’s marketing and retail strategies are curated to cut costs, attract consumers, and sell more stock.
Characterized by product availability, stores in every locality, low prices, bulk buying options, and fast services, it has surprisingly thrived in the time of online retail and even the Covid-19 pandemic.
What is a Walmart Rollback?
One of Walmart’s most effective strategies to keep their upswing sales going is called “Rollback.” While similar to other forms of low-price marketing, it is not the same as a clearance sale but proves to be quite an effective marketing tool, especially in the era of post-Covid inflation.
The reason why Walmart sales remain unaffected during particularly slow times for sales is that Rollback incentivizes customers to buy more items.
Since the price reduction is temporary, the time factor makes customers rush to get the best deals for essentials and non-essentials alike, which doesn’t have the disadvantage of forced price cuts owing to less demand that motivates sales and discounts.
Walmart Rollbacks usually last a month or two and contains deals like one-time offers, BOGOF, clearance mark-downs, “Was/Now” advertising, limited buys, and “two-for.”
The Efficacy of Walmart Rollbacks
In line with their pricing philosophy of maintaining everyday prices, without increments laterally related to inflation, Walmart assures customers that they charge the correct prices. This maintains their huge footfall even in times of crisis like the pandemic.
On surveys, Walmart also comes out as a trusted retail store, so their philosophy of not selling gimmicks or special offers created to mislead customers into buying lower quality goods seems to be working quite effectively.
Rollbacks Vs. Sales – What’s the Difference?
Sales are more commonly conducted when the season for certain goods is ending or their shelf-life is expiring, which is why Walmart doesn’t view their Rollback strategy as a sale because it is not prompted or necessitated by anything in particular.
Rollbacks are a simple price reduction for a given time frame to incentivize the purchasing power of customers by a further price reduction on already reasonably priced items.
While price reductions that characterize Rollbacks might still sound indistinguishable from sales, there are several critical distinctions between the two.
Differing Marketing Strategies
Sales can be like mentioned previously, marketed using end-of-season, clearance, or festivities, and thus occur at particular times during the year.
Most notably, Mother’s Day Sales, Back-to-School Sales, Black Friday Sales, Labor Day Sales occur at a specific time of the year, and the marketing is curated to center this time.
That is not the case with Rollback since there isn’t any particular marketing tactic/time of the year to get in more customers through the door. Rollbacks, therefore, are used by Walmart as a specific kind of promotion.
Specific to Items
Generally, sales are usually placed on a group or category of items in a store or a department, e.g., 20% on winter apparel, end-of-season deals on summer/winter apparel, mark-down sales on grocery items, etc. Brands, especially, are included under the items that are put on sale by a retailer.
This is not the case with Walmart Rollbacks, where specific items undergo a price reduction of a particular amount.
This reduction is not uniform across other items, even by the same manufacturer or under the same brand. Hence, a rollback price for one flavor of Pringles may be different from the Rollback price of another Pringles product.
No % Offs
Sales usually sloganize using titles like “50% off” or “70% off” on a group of items or items under a brand. This is drastically different from Rollback prices, which only undergo a price reduction by a very specific amount.
For e.g., potatoes under a Rollback price might go from $5 a kilo to $3.75 a kilo, but during a sale, they’ll be marketed as “Potatoes – 20% off.”
Not a Clearance Sale
Rollbacks are not to be confused with clearance sales since Walmart has a separate category for the sale of clearance items already. Clearance items might be items that are nearing the end of their shelf life, overstocks, items the company may no longer carry, or items past their seasonal utility.
Rollback items are those items that Walmart stores and restocks routinely when the stock runs out. Rollback items at Walmart are also different from clearance sale items in that they do have a return & exchange policy. Rollback items, however, can and often do become clearance items through a further price decrease.
Online Rollbacks, Items, and Disadvantages of Rollback
For customers who don’t necessarily want to visit their local Walmart, the online store at Walmart.com also contains Rollback items with their before/after prices clearly mentioned. This is effective in increasing online purchases just as well as sales would do.
To indicate which items are on Rollback, Walmart flags them as such or places them in a separate category so the customer can pick and choose.
Another practical part of Walmart’s Rollback strategy is that only the items they have been stocking for a while are put on Rollback pricing.
This avoids the risk of lowering sales or making a calculated loss by reducing the price of newer items on the shelves. Walmart, therefore, observes sales numbers for old items and then categorizes them as Rollback.
Rollback for Suppliers
While Rollback policies primarily do benefit the stores that adopt them as policy, they aren’t always the best, consequentially, for suppliers.
Suppliers should look into sales analysis before committing to a Rollback policy for their supplies at Walmart, especially after Rollback ends.
The first thing that can happen within a Rollback that won’t particularly affect suppliers is no changes in price.
Sales and returns will not be involved in the least, and so increases in profits for suppliers owing to heightened sales won’t be a consequence. Another thing that can happen is that the Rollback price tends to stick, especially when the item’s sales are drastically increased given the reduced price.
The sales performance of some things can be improved with Rollback prices, and thus the new price becomes the reasonable one for said product. If the supplier can see the improved performance of the item, then they can reevaluate and reset prices for said products.
Walmart Modulars are also affected by the reinstatement of Rollback prices on some products. If the items aren’t selling even after lowered prices, Walmart removes them from its modular. These items are either shunted to clearance, removed from shelves or sold out at their normal price.
Summing It Up
Rollback, therefore, maintains Walmart’s reliability in terms of pricing and prevents Walmart customers from falling prey to distracting and misleading coupons, gimmicks, and sales tactics, hence maintaining consumer satisfaction.
The temporary price reduction incentivizes customers to make full use of lowered prices at a specified time interval. It enables Walmart to keep its demand levels up even in unpredictable and slow time periods like during post-Covid inflation.
