Working on your Walmart pricing strategy? A Rollback may drive sales and expand your customer base! For a consultation about this and other marketing tactics, set up a call with 5G Consulting.
What Is a Walmart Rollback?
In Walmart stores, a Rollback is a strategy where the supplier and Walmart agree to lower the price of an item for a set period of time. Once the time period has elapsed (most Rollbacks are active for around 90 days), the item goes back to the original selling price. Walmart will usually flag an active Rollback with “Was/Now” signing.
While Walmart does lower item prices for a set period of time, the company does not view a Rollback as a traditional retail “sale.” Walmart sees a Rollback as giving its customers even more on top of its low prices, supporting the company slogan of “Save Money. Live Better.”
How Is a Rollback different than a Sale?
Just like a traditional retail sale, a Walmart Rollback is offering an item at a lower price. To differentiate the Rollback from other retailers’ offers, Walmart structures this pricing strategy with some unique qualities:
1. Lower Price Only; No Additional Customer Ask
When a Rollback is applied to an item, the Walmart customer is not asked to do anything to get the lower price. Other traditional sales may be buy one, get one (BOGO), require coupons, ask for store loyalty points, ask that customers follow on social media, or some other requirement to “earn” the lower price. The Rollback is simply a temporary price reduction with no additional ask.
2. No Theme or Special Event
Walmart Rollbacks are not tied to marketing events or occasions. Many retailers advertise savings around holidays or specific times of the year (i.e., January clearance, Back-to-School sales, bag-stuffing events for a single price-point, etc.). Rollbacks are only about the price reduction. While Walmart may have Rollbacks on items specific to an event, they will not be featured as Christmas Rollbacks or Valentine’s Rollbacks.
3. Rollbacks are for Individual Items
When thinking of a traditional retail sale, it usually covers multiple items or categories (i.e., Halloween candy clearance, winter coat sale, summer automotive sale, etc.). A Walmart Rollback is specific to an individual item. You may see a Rollback on Velveeta Singles, but not a Rollback on all cheeses.
4. Rollbacks focus on price, not percentage
Most retail sales focus on a percentage of savings because it sounds like a greater deal (75% off, buy one and get one at 50% off). Rollbacks specify going from one price point to a lower price point.
Do Walmart Rollbacks lead to being on Clearance?
While this happens in some cases, Rollback items being eliminated from the Walmart modular is more the exception than the rule.
There are instances where an item is not selling as well as Walmart expects. To drive excitement and get more customers to consider trying it, Walmart may suggest the supplier take the item to a temporary Rollback price. After observing item performance at Rollback, the following things may happen:
Return the item to the original price
After the set Rollback time has elapsed, the item can be returned to its original price. If the item experienced better sales at the Rollback price, this will be an opportunity to see if the same customers are willing to pay the higher price. If sales slow again, it’s time to consider a permanent price adjustment.
Keeping the Rollback price
If sales were dramatically better under the Rollback price, a permanent price change can be made. It will no longer be labeled as a Rollback, but as the item’s new price point.
Move the item to Clearance
If the item experienced no movement under the Rollback price, it is in danger of a loss of modular space or being removed all together. While an item placed on Rollback does not mean it’s definitely headed for Clearance, it does happen when the item does not sell.
What items are qualified to be placed on Rollback?
If you have ever been in a Walmart store, you’ve seen the signs for Rollback items. You’ll see them in each department with the current and previous price-points. However, Rollbacks are not meant for brick-and-mortar stores only.
If you have products on Walmart.com, these can also be placed on Rollback. The same conditions apply and Walmart will monitor Rollback performance, whether in the store or online.
While being featured on Rollback is a great way to bring more attention to your items and expand your customer base, Walmart does require a selling history. What that means is, before putting your items on Rollback, you need to have been selling them in Walmart (or on Walmart.com) previously. Walmart will never debut a new item at a Rollback price.
Learn More From 5G!
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