Demystifying Walmart‘s Product Identification System: A Deep Dive into SKUs

With over 4,700 stores across the United States and an e-commerce business serving millions of customers, Walmart relies on a vast and intricate product identification system to keep track of its inventory at scale. The core of this system is Walmart‘s Store Keeping Unit numbers, commonly referred to as SKUs. But what exactly are SKUs, and how does Walmart use them to manage its empire of products?

What is a Walmart SKU?

A Walmart SKU or Stock Keeping Unit is a unique 8 to 12-digit alphanumeric code assigned to every distinct product variation that Walmart sells. While each product has a universal UPC barcode, SKUs allow Walmart to identify specific variations of that product in its inventory, like different colors, sizes, scents etc.

Here are some key facts about Walmart SKUs:

• Over 100 million unique SKUs in Walmart‘s system and growing daily
• Persists over a product‘s lifetime unlike changing UPCs
• Encodes information about product attributes and categories
• Used internally by Walmart for tracking and logistics

Let‘s explore a sample Walmart SKU: 6841009-4325

This SKU likely breaks down as:

• 6841009: Product category and brand identifier
• 4325: Product color or other variation attribute

How Walmart Generates and Assigns SKUs

Walmart leverages custom algorithms and inventory management software to assign a unique SKU to every product variation it carries. When new items are added to Walmart‘s catalog by suppliers, they are registered in Walmart‘s point-of-sale system which auto-generates and designates SKUs based on the product data.

The algorithm uses the UPC, manufacturing specs, product category, brand, and variation attributes to encode useful information into the SKU digits. This helps ensure inventory can be tracked precisely.

Over 2,500 new SKUs are estimated to be created daily as Walmart takes on 10,000+ new products each week. Managing this exponential SKU growth requires sophisticated inventory software.

Comparing Walmart SKUs to UPCs

While SKUs are for Walmart‘s internal use, UPCs are standardized barcodes assigned by manufacturers to identify a specific product. Here‘s how they differ:

Since UPCs are broad product identifiers, Walmart needs SKUs to track product variations like different colors, materials, scents, and other attributes that UPCs don‘t distinguish.

The Power and Scale of Walmart‘s SKUs

Walmart‘s SKU system has enabled the detailed tracking of inventory and sales at massive scale. Here are some impressive facts:

• By 2022, Walmart likely had over 130 million active SKUs
• Walmart‘s SKU growth rate is estimated at 2-3% annually
• Top categories by SKU count include grocery (~500k SKUs) and apparel (~300k SKUs)
• Walmart adds over 300,000 new grocery SKUs per year to tailor to regional demands

"Our ability to monitor thousands of SKUs across a chain of this scale provides unmatched visibility into product performance," says Tony Geba, Walmart‘s VP of Merchandising.

How Suppliers and 3rd-Parties Integrate with Walmart‘s SKU System

For Walmart‘s SKU system to function, 3rd party suppliers and vendors need to integrate with it:

• Suppliers: Provide detailed product data to receive assigned SKUs for tracking
• Marketplaces: Use Walmart SKUs to list items for sale on Walmart‘s marketplace
• Analytics Firms: Leverage Walmart‘s API to enrich SKU data with pricing trends, reviews, etc.

"By integrating with Walmart‘s SKU architecture, we can empower consumers with even more tailored product recommendations and insights," says Raul Sanchez, CEO of Skuity Analytics.

The Future of Walmart‘s SKUs

As Walmart grows its e-commerce channel and experiments with new retail tech like AI, its SKU system will likely expand in sophistication.

"Looking ahead, we‘re focused on using our robust SKU data to optimize dynamic pricing, personalized promotions and fulfillment based on local demand signals in real-time," remarks Jordan Taylor, Walmart‘s VP of E-Commerce Strategy.

So the next time you make a purchase at Walmart, you‘ll know there‘s a SKU working silently behind the scenes to deliver you the optimal shopping experience!