Photo: Eloquii
Walmart adding plus-size women’s brand to its digital portfolio
Walmart is adding to its roster of digital-first retail brands with the planned acquisition of Eloquii, a plus-sized women’s fashion e-tailer that also operates five physical store locations.
The move, according to a blog post by Andy Dunn, SVP of digital consumer brands, Walmart US eCommerce, is another piece in a strategic puzzle whereby the retailer brings together digital businesses that demonstrate its commitment to “building brands and customer relationships.”
Adding Eloquii, Mr. Dunn wrote, was another example of Walmart being “laser focused on developing a portfolio of direct to consumer brands with a unique assortment you can’t find anywhere else.”
Eloquii got its start as a part of L Brands in 2011 before being shuttered a year-and-a-half later, Recode reports. In 2014, a group of employees and an investor bought the brand and relaunched it as an online-only business. In recent years, the brand has been on the ascent with fashionable clothing that goes beyond the basics for women sizes 14 and up. Eloquii, which has raised $42 million in venture capital, decided that it would be better served going forward by joining Walmart rather than pursuing more funding.
Eighty percent of Eloquii’s customers work full-time, and the company has developed its 9-to-5 Kit and Premier Workwear Kit lines to address this need. The business appears ideally suited to fashion trends in the U.S. where more than 68 percent of women American women wear size 14 or larger, according to Plunkett Research. The current market for plus sizes, which is pegged at around $21 billion, is expected to grow at an average annual rate of 4.1 percent through 2015, according to Marketdata.
Eloquii will be added to a digital portfolio that now includes Bonobos, Hayneedle.com, Jet.com, ModCloth, Moosejaw, Shoes.com and Walmart.com. CEO Maria Chase and Eloquii’s staff will join Walmart’s e-commerce division, reporting to Mr. Dunn.
Discussion Questions
DISCUSSION QUESTIONS: How will the acquisition of Eloquii stack up against other digital-first retailers acquired by Walmart in recent years? What do you expect Walmart to do with this brand that is either similar to or different from how it has handled past acquisitions?
Poll
BrainTrust
Georganne Bender
Principal, KIZER & BENDER Speaking
Adam Silverman
SVP Marketing, Theatro
Our forecasting predicts that the plus-size apparel market will grow by 22.9 percent over the next five years. That alone is a good reason for Walmart to make a firmer move into the territory.
Eloquii is a good vehicle to do this. It serves a different target than the core Walmart brand, has a strong online profile, and has significant potential for growth. It also fits with Walmart’s objectives of building up a portfolio of digital brands.
It is, however, interesting that Walmart is making the move by acquisition. By comparison, Target has focused more on the plus-size market by developing its own brands like Universal Thread. In my view this all adds up to the fact that the Walmart wants to expand its reach to new customer segments in a way that it could not through its own stores or core brand.
This is a little bit of Groundhog Day – Walmart making smart acquisitions to bolster its business both inside and on the periphery of its core. This is a slam dunk for their demographic and will provide an unbelievable distribution vehicle for the Eloquii brand while bringing some fashionable plus-size clothing to Walmart. As with all of their acquisitions, they are taking the best practices and leveraging them across other parts of the business — I expect to see the same for things like the 9-to-5 kit, etc.
With its acquisition of Eloquii, Walmart is simply adding another tentacle to its niche-brand hydra. Collectively, these brand acquisitions give Walmart authority, discoverability (search) and category-specific talent/leadership. Plus-sized apparel is a real specialty business that requires close attention to profitability. It’s not just as easy as making clothes bigger and consumers don’t always understand when plus-sized line extensions cost more. Walmart is smart to acquire a brand that has worked out the business model. No doubt Eloquii will provide expertise that will benefit Walmart’s entire plus-size business.
Absolutely and based on what I can see from the brand, their fashion is spot on — flattering to the plus-size figure instead of drapes and hangs to cover up. This is a smart move, for my 2 cents.
I must be missing something in the Walmart strategy. Buying up brands as a source of added revenue/profitability is understandable, but how when they operate independently that does anything for Walmart customer relationships is beyond me. I just do not believe there is any viable crossover from a Bonobos or Eloquii customer to Walmart or Sam’s Club. I know of no one that’s going to think “I need groceries, a custom tailored (Bonobos) suit with some cheap (Walmart) shoes, and my wife needs a really nice dress from Eloquii and a cheap (Walmart) purse.”
Shoppers will buy from their chosen source (brand) and care less that Walmart is the owner. It feels like some high up folks at Walmart are convincing themselves that this is the way to match Amazon.
More than half of women in the U.S. aged 18 to 65 wear size 14+, even so, the plus-size market is underserved. Or not served the way the customer wants it served. Yes, there are lots of places for this customer to shop, but those places are not always stocked with the fashionable clothing she wants to buy.
Walmart strives to be America’s retailer so Eloquii is a nice addition to its portfolio. Let’s hope Walmart can make the Eloquii customer feel the way Ashley Stewart’s customers feel about that brand. Because this customer deserves a fashion champion.
Walmart is usually a smart player in the market and expanding their customer base is part of the focus of this deal. They’ve been looking to move upstream and across segments to reach a broader continued online audience. The Eloquii deal fits nicely into this goal.
This is a smart acquisition that can potentially give Walmart more share in the plus-size demographic.
Most, if not all, of these acquisitions have been quite small, certainly compared to Walmart (but then who isn’t?), and I’m guessing unknown to most WM shoppers, so it’s safe to say what they are really buying is the talent and experience contained within them. Will it work? Will they fit together into a coherent program or just be an odd collection pushed to the margins of the company? I suspect some will and some won’t (work), but even for the “successes” it will be a constant struggle against the existing WM culture, which is a monolith of volume and low prices.