Walmart Reinventing Apparel and Home
The retail giant is making soft goods a focus with a reinvented web site and new brands.
The words “Walmart” and “style” aren't often used in the same sentence, but that could soon change as the retailer reinvents its apparel and home businesses with an emphasis on higher quality and trend-right products, editorial-style images and a new online shopping experience described as “inspirational” and browsing for items called, “discovery.”
Walmart Inc. is the top apparel retailer in the U.S., with $35 billion to $45 billion in annual sales. But with Amazon in the number-two spot, and Target building its portfolio of homegrown brands, the Bentonville-Ark.-based retailer is watching its back.
Walmart's relentless focus on “Every Day Low Cost and Every Day Low Price” hasn't left room for much besides basics, which may be why the retailer's apparel business accounts for just 7 to 8 percent of $500.3 billion in fiscal 2018 sales.
On March 1, Walmart will launch four new apparel brands. Time and True for women has a boho vibe with peasant dresses at $16.48, embroidered tie-sleeve tops at $15.44 and classic looks such as a Lyocell-belted shirtdress at $18.48. The brand has big swimwear and accessories components, especially jewelry.
Terra & Sky is Walmart's new plus-size label, while Wonder Nation for kids features brightly colored clothes at low prices — $6.88 for a silk lace hanky dress and $9.44 for boys' cargo shorts. Fashion items will reportedly account for 10 percent of the collections and will be updated every three months.
Terra & Sky could compete with Target's Universal Thread, which bowed this month. Wonder Nation could go up against Target's Cat & Jack, which logged $2.1 billion in sales in its first year. Cat & Jack on Thursday launched a baby subscription box for $40. Details of the fourth line, to be focused on men's, are unknown at this time.
Walmart on Tuesday will be holding a press event in Manhattan to preview the four brands.
Craig R. Johnson, president of Customer Growth Partners, believes Walmart's single biggest impetus for addressing apparel is “the great progress Target has made. Target made a big push and has gotten some great results. The Target threat is the more salient than Amazon's threat.”
Not everyone agrees. “As Walmart rethinks its strategy to compete with Amazon, it will make more moves to tap into less budget-minded consumers and broaden its brand appeal,” said Sean Maharaj, director in the retail practice of AArete. “Walmart traditionally wasn't considered a place to buy fashion, but with the amount of traffic coming through its stores and web site, it would be negligent not to capitalize on that flow with more diverse brands and high-end partnerships. Walmart realizes that growth and survival need to come from innovative ideas and we'll see more, especially as it prunes store count.”
Walmart is also pruning tired brands from assortments in stores. White Stag, Faded Glory and Danskin Now will no longer be sold; Just My Size will be available only online, and George will shift its focus to men only.
Meanwhile, Amazon has quietly built a portfolio of apparel labels — 41, according to research firm L2's count — with names such as James & Erin, Society New York, Peace Love Maxi, Paris Sunday and Velvet Rope for women.
“Walmart is paying more attention to style than in the past,” said Deborah Weinswig, founder and chief executive officer of think tank Coresight Research. “This is part of a strategy to [combat] Amazon's steadily increasing online apparel sales. Amazon's private labels have a real shot at eroding the market share of established players.”
“It's going to be interesting to see if the sudden overdue attention Walmart is paying to its apparel business will have a positive difference by holiday,” said Carol Spieckerman, president of Spieckerman Retail. “Apparel has been left untouched. Like Target, Walmart is evaluating apparel and putting some energy behind it and taking a private brand approach.”
The redesign of the apparel portion of walmart.com will be launched in the spring, around the time the retail giant's partnership with Lord & Taylor bows with a branded flagship shop for the department store featuring apparel, shoes, accessories and jewelry, and free two-day shipping.
Walmart's acquired brands, Shoes.com, Moosejaw, ModCloth and Bonobos are allowing the retailer to cater to “different consumer segments through different channels,” said Weinswig, noting that several of the brands are sold on Walmartowned Jet.com. “Bonobos and ModCloth appeal to Millennial fashion shoppers, while the new private labels cater to price-conscious shoppers.”
“Target and Amazon are continuing to roll out new private labels, but it's not simply about legacy retailers stemming any loss of share,” Weinswig added. “The closure of more than 3,300 apparel stores and almost 700 department stores in the past year means billions of dollars of apparel spending are potentially up for grabs. Walmart is hoping to capture some of that.”
On the home front, Walmart introduced elevated editorial-style photography. Customers can now shop by room, choosing from nine furniture styles, including modern, mid-century, traditional, glam, industrial, bohemian, farmhouse, transitional and Scandinavian. A new shopping experience showcases the new product assortment, which has doubled since last year.
“Some categories are more transactional, like groceries and consumables, while others are more inspirational, like apparel and home,” said Anthony Soohoo, senior vice president and group general manager of home at Walmart U.S. e-commerce. “The experience will roll out over the coming weeks and will offer the first glimpse of our broader walmart.com redesign, which will launch later this year.”
“It almost looks like something out of West Elm,” Johnson said. “The photography and context. Home is a hot category. If Walmart can do the kind of thing it's doing with home, analogously with apparel, that's going to be a very big idea. It's not going to be cost-free [in terms of the bottom line].”