Should the outdoor industry welcome selling on walmart.com?

Discussion
Source: Walmart.com
Sep 10, 2018
Tom Ryan

On Aug 27, Walmart launched a Premium Outdoor Store microsite stocked with nearly 50 well-known outdoor brands. Walmart promised those brands greater reach to “exponentially more customers” and even an introduction of the outdoors to underrepresented groups.

By the close of last week, a third of those brands left the site over concerns about selling on walmart.com.

“I wasn’t naive enough to think that all outdoor retailers would welcome the Premium Outdoor Store with open arms, but I am surprised by the vehemence of the attacks by some of our industry’s leading retailers and the threats to drop brands that participated,” wrote Eoin Comerford, general manager of Outdoor, Walmart U.S. e-commerce and CEO of Moosejaw, Friday on Linkedin in an open letter to the outdoor industry.

The team at Moosejaw, the outdoor e-tailer acquired by Walmart in early 2017, is responsible for managing the site and Moosejaw’s relationships helped many vendors sign on.

Mr. Comerford credited April’s relaunch of Walmart.com — including a more image-driven versus-transactional look — for making Moosejaw’s vendors comfortable selling directly on the site. But Outside Magazine said some vendors felt the upgrades weren’t as advanced as promised.

The bigger concern is that, following the launch, some owners of outdoor specialty stores threatened to put holds on orders of any vendor selling through Walmart.com.

Outdoor retailers have continually complained about seeing brands sold by third-party sellers on Amazon.com below MAP (minimum advertising prices). Walmart claims to be offering more control over third-party sellers on its online marketplace.

Mr. Comerford told the Wall Street Journal that the response from outdoor retailers is shortsighted as consumers expect a wide selection of items online and he believes limiting selections to specialty is “just not going to work long-term.”

He concluded his Linkedin note with a challenge: “At the end of the day, the question becomes, ‘What industry do we want to be?’ A small, exclusionary, slow-growing industry dominated by one or two large retailers that dictate everything from distribution and promotional calendars, or a large, inclusive, fast-growing industry embraced by a growing customer base and populated by many innovative and inspiring outdoor brands?”

DISCUSSION QUESTIONS: How open should the outdoor industry be — both vendors and specialty stores — to supporting Walmart’s Premium Outdoor Store website? Given Amazon and other online competition, do outdoor vendors have a better choice than partnering with walmart.com?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The better Walmart gets at understanding and catering to small business and brands, the faster premium sellers will move to Walmart and abandon Amazon to bots and resellers."
"The real question in this case is whether the specialty retailers in the space are powerful enough to collectively sanction trade with Moosejaw."
"This might be one of the last industries to recognize the new age of retail. The outdoor industry needs to show agility and be open to selling on the Premium Outdoor Store. "

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17 Comments on "Should the outdoor industry welcome selling on walmart.com?"


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Mark Ryski
BrainTrust

The reaction isn’t necessarily surprising, but ultimately sales volume almost always wins. The concerns by the outdoor industry about Walmart seem misplaced in the retailing world we live today, where virtually everything is available from Amazon and other major retailers. Almost every category has faced the Walmart or Amazon threat at some point, and in every case I can think of each has acquiesced.

Outdoor vendors certainly have choice about where they want to sell their products, but ultimately it comes down to reaching customers. Will it hurt some of the outdoor specialty stores? Probably, but how is this different than any other category? Ultimately every retailer needs to find their place in the market, and competing against Walmart and Amazon is just part of the market.

Naomi K. Shapiro
BrainTrust

Even though this issue is more complicated than it looks on the surface, I heartily agree with this answer, the endgame being: greater exposure, more sales, more profit … if you can’t beat ’em, join ’em, and don’t cut off your nose to spite your face.

Lee Kent
BrainTrust

Absolutely Mark! It is all about what the consumer wants and not about how the industry wants to position themselves. They may be controlling themselves right out of the game. For my 2 cents.

Art Suriano
BrainTrust

Outdoor vendors can continue to go it alone or decide if partnering with the Walmart Premium Outdoor site or Amazon is right for them. We are in a state of flux right now with the world of technology changing so much and so quickly that any given day there’s another opportunity and possible new venture to pursue. It’s hard to say how things are going to end up but no doubt there will be a blend of e-commerce leaders like Walmart and Amazon continuing to make many partnerships with other retailers, e-tailers and manufacturers. In the end, I see Walmart Premium Outdoor as another choice that will find a niche and be successful.

Susan O'Neal
BrainTrust
5 months 9 days ago

Walmart has a significant opportunity to offer overall better terms and solutions to premium brands – not just within outdoor, but across multiple industries. As long as they can provide the traffic to rival Amazon’s sales, suppliers who have seen a significant percentage of their volume move to Amazon have a great deal of reason to give Walmart a chance. The better Walmart gets at understanding and catering to small business and brand needs, the faster those premium sellers will move to Walmart and abandon Amazon to bots and resellers.

Phil Chang
BrainTrust

This might be one of the last industries to recognize the new age of retail. The outdoor industry needs to show agility and be open to selling on the Premium Outdoor Store. Outdoor brands and sports brands haven’t really adjusted well to the new retail world — closures of sports retailers have been well documented.

The Premium Outdoor Store is just a punctuation for the outdoor/sports industry that big, fat, margins are a thing of the past. Lamenting that those are gone/lashing out at new retailer options aren’t going to change that. They need to get with the program — build experiential, cater to the evolving consumer and be agile enough to sell things that you can be competitive with on the Premium Outdoor Store.

Shep Hyken
BrainTrust

Any retailer or vendor should consider all channels. The Walmart Premium Outdoor Store website is simply another channel. Does it make sense? Are the terms right (exclusive vs. non-exclusive, payment, etc.)? Are there any other negatives to being aligned on the Walmart site? What are the positives? What are the opportunities for exposure and growth? All of these questions and more should be addressed.

Christopher P. Ramey
BrainTrust

The benefits of Walmart and Moosejaw are plenty and well-documented. What’s missing is the sanctity of participating brands, their traditional customers and distribution channel.

Brands are defined by the brands with whom they’re associated. There is no platform that is appropriate for every brand.

Lee Peterson
BrainTrust

Joining a marketplace site is a brand issue first, a DTC strategy second. Would Patagonia ever be on a Walmart or Amazon marketplace site? Probably not. Duluth Trading Co.? Sure. And Nike already is.

The DTC strategy of today should be threefold: 1.) an excellent e-commerce site, 2.) experiential stores and 3.) collaboration with a high visibility marketplace site. Nike has done all three, many others have done none of the above. But regarding the marketplace collaboration; that’s a brand issue first and certainly not a no-brainer decision.

Harley Feldman
BrainTrust

The premium outdoor product suppliers should consider Walmart as an outlet for their products. Walmart should not just be considered the low-cost seller as their product line expands and their store and web presence continues to grow. Eyeballs on products should help any retailer, and Walmart is providing an opportunity for a huge number of eyeballs. There may be other choices like Amazon for premium outdoor product suppliers, but it is very hard to ignore walmart.com and the company’s 4,200 stores as an opportunity for the suppliers’ products.

Mohamed Amer
BrainTrust
Competitors have historically lined up along company-specific dimensions such as product and brand in a zero-sum game. That made ample sense with inherent business value characterized in products. Today, value realization is centered on the individual consumer and is changing the competitive battle lines. A renewed focus on how value is created and realized will help companies navigate this consumer-driven business landscape. To bring this new value to the consumer, companies must include technology, product, personalization, access, convenience and timing in a frictionless commerce mode in the overall business design; moreover, it’s increasingly difficult for all of this to come together — at scale — by a single player. An ecosystem of companies is necessary in order to deliver and — even more importantly — derive future business benefits. A traditional view of competition will not hold for long as consumers’ expanding choice sets, access to technology, and rising expectations force new relationships within and across industries that are based on redefined value sets. The opposition to Walmart’s efforts in this case reflect strategies that… Read more »
Liz Crawford
BrainTrust

Outdoor vendors may be concerned about the erosion of brand equity and cachet on the site, now that Moosejaw is operated by Walmart. However ultimately, those vendors probably can’t afford to snub an enormous e-tailer, whoever that may be.

The real question in this case is whether the specialty retailers in the space (REI, Bass Pro Shops, Orvis, Patagonia, etc.) are powerful enough to collectively sanction trade with Moosejaw. While Walmart, and its various businesses, have successfully “killed” a few categories, the company has had less success with higher-end categories. A Costco might have better luck with that kind of endeavor. I could make an argument either way on the outcome — it’ll be interesting to see what unfolds.

Rich Kizer
BrainTrust

This entire conversation has been experienced and repeated by every retailer over the years. And the retailer reactions discussed here should not surprise anyone. But the world is moving faster and forward. That being said, it is incumbent upon the retailers to become better, showing their personalized in-store experiences as extreme knowledge and specialization to the outdoor customer. Literally every retailer who has been confronted to this issue has had to “up” their service and customer experience. The new marketplace is not going to stop!

Kai Clarke
BrainTrust

Yes, selling on Walmart or Amazon should be welcomed by all manufacturers, and threats from local retailers are simply poor attempts to hold back the inevitable changes that are shaping our retail worlds. We all shop at large retailers at one point or another in our lives (think cars, gasoline, grocery, clothing, school supplies, computers, etc.). Partnering with Walmart is not a bad choice, simply another choice. This needs to be recognized and embraced by the outdoor industry.

Ananda Chakravarty
BrainTrust

In this case there was miscommunication and unclear expectations for vendors and specialty stores. As Walmart attempts to move upstream, the outdoor industry seeks to preserve their “specialty” status — and in many cases it makes sense. Scarcity makes for a great product story combined with strong brand building. However, the same scenario played out (and is playing out) with luxury.

The question is unique to the brand opportunity and each vendor needs to figure this out for themselves. The benefits are clear: larger customer base, broader distribution and regulated control of their brand online (promised anyway). The costs: brand dilution, distribution control, and different focus customers.

Vendors can build their own sites or work with larger, dedicated outdoor players like REI, Cabela’s and Camping World (who want to protect exclusivity of the “personal outfitter” brand). Regardless, the vendors need to find some way to be online.

James Tenser
BrainTrust

I can well imagine the push-back from traditional outdoor retailers when they saw their vendors’ products appear on walmart.com. If I were in their boots, I’d bring pressure too, even if I knew it was only a temporary holding action.

If minimum advertised prices are indeed being respected, then the objection may come down to the Walmart brand aura, and not a fear of margin erosion.

There’s a natural tension between brands’ desire for wider distribution and specialty retailers’ desire to carry an assortment with brand cachet. Walmart has very vigorously stirred this pot.

Top brands that choose to withdraw from the big online marketplaces may leave an opening for mass market brands to step in. Outdoor product manufacturers are entitled to choose their strategies in this regard.

David Naumann
BrainTrust

As a manufacturer, it is hard to ignore the volume of sales that Amazon, Walmart and other marketplaces represent. If your competitors are selling on these marketplaces, that are often the go-to place for consumers’ initial product searches, it is a compelling argument to join the bandwagon.

This is not good news for specialty stores, that, in spite of the name for this segment, are often not all that special. When you are selling commodity products (items sold at many other retail chains), you need to find a way to be special. You need to give consumers a reason to be loyal to your brand.

wpDiscuz
Braintrust
"The better Walmart gets at understanding and catering to small business and brands, the faster premium sellers will move to Walmart and abandon Amazon to bots and resellers."
"The real question in this case is whether the specialty retailers in the space are powerful enough to collectively sanction trade with Moosejaw."
"This might be one of the last industries to recognize the new age of retail. The outdoor industry needs to show agility and be open to selling on the Premium Outdoor Store. "

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