BENTONVILLE, Ark. — One of the biggest stories in retailing for the past year has been the resurgence of Walmart’s flagship U.S. division.

One of the biggest stories in retailing for the past year has been the resurgence of Walmart’s flagship U.S. division.

A major factor in the segment’s rebound has been the success of a sound merchandising strategy supported by an aggressive and innovative marketing approach.

Merchandising and marketing in Walmart U.S. is now a blend of the old and new, a combination of innovation with the retailer’s time-tested everyday-low pricing (EDLP). Much of the groundwork, or foundation, of Walmart’s merchandising success, though, lies in a renewed focus on supplier collaboration.

That collaborative focus is multifaceted, encompassing sourcing, logistics and new ways to share and use data to plan together.

In recognition of the importance that Walmart U.S. has placed on this facet of its business, MMR has given its first-ever Retail Partnership Award to the merchandising and marketing team headed by Duncan Mac Naughton, executive vice president and chief merchandising and marketing officer of Walmart U.S.

When Mac Naughton joined the company in 2009 as chief merchandising officer of Walmart Canada, he brought more than 25 years of experience in the consumer-packaged goods and retail businesses. He had most recently served as EVP of merchandising and marketing for Supervalu Inc., but his resume also includes leadership roles at Kraft Foods Inc., H-E-B and Albertsons Inc.

In 2010, Mac Naughton joined the Walmart U.S. team as executive vice president of merchandising, and today he exercises responsibility for all aspects of merchandising as well as ­marketing.

The team that Mac Naughton leads, and which is being recognized in this feature, includes: John Aden, EVP of general merchandise; John Agwunobi, senior vice president of health and wellness; Andy Barron, EVP of softlines; Scott Huff, SVP of consumables; Pam Kohn, EVP of merchandise services; Stephen Quinn, EVP and chief marketing officer; and Jack Sinclair, EVP of food. Together, they have brought a new energy and focus that promises to make Walmart U.S. an even more formidable competitor.

Mac Naughton speaks of Walmart U.S.’s merchandising priorities in terms of five P’s: the traditional four P’s of price, product, place and promotion, supplemented by people. Supplier collaboration is part of the people equation.

At the core of the retailer’s approach to supplier collaboration is a process initiated in 2010: joint business planning sessions.

"That is really about setting mutual growth targets with our big suppliers where we can make a difference in a category for our customers," Mac Naughton explained at an investors conference in April. "It’s about sharing our resources, having a transparent dialogue so we can share our strategy and they share their strategy."

Walmart for years has set the standard in sharing data with suppliers through its now-legendary Retail Link program. But that was limited to Walmart’s internal data. This year the company took an important step by re-engaging with Nielsen to obtain external data rich in competitive insights.

That data, Mac Naughton pointed out, serves as a guidepost as to where and how much the retailer should invest to either accelerate growth or improve share.

"Meaningful, meaningful data here," he said during the company’s Analyst Conference in October. "Market-by-market, category-by-category, brand-by-brand, product-by-product. We’re diving deep into what products sell for …Where do we need to be priced? It’s changed the game for our customer, and it’s changing the way we talk to our suppliers."

Once Walmart achieves its goals of price leadership and price separation versus competitors, it is communicating its price leadership with an aggressive "local basket campaign" that emphasizes the price separation between Walmart and its local competitors.

"It’s local; it’s customer-centric; it’s real-time," Mac Naughton said. "And it is driving the customer. In these markets, we’re up 1% in comp sales and 1% in traffic."

He added that since launching the campaign in 31 markets, Walmart has driven up its market share 30 basis points above the chain average.

While pricing and promotions are at the heart of any merchandising strategy, Walmart looks for more from its suppliers, particularly in the areas of innovation and exclusivity.

"We work very closely with our suppliers to make this come to life," said Mac Naughton. "We want to be the destination for new. That drives loyalty, it drives consistency, and it also will drive better long-term share in a category."

Walmart seeks local relevance by engaging with local suppliers to provide favorite products. Whereas in prior years, the merchants had to travel to the stores to discover such opportunities, now they can leverage the Nielsen market data to identify them much more quickly.