Walmart is focused on expanding its digital brand portfolio
Walmart has been throwing its considerable weight into an impressive array of digital strategies, ranging from click-and-collect at its mainline stores to digital-first brands like Jet.com, Bonobos and the newly-launched Allswell.
Walmart is moving fast and making lots of news, but is the strategy making sense?
At the recent Shoptalk conference in Las Vegas, Jet.com president & CEO Mark Lore and Andy Dunn, founder and CEO of Bonobos, discussed some of the reasoning behind Walmart’s digital expansion.
“We buy companies we can help accelerate,” said Lore. “Our M&A strategy has been to buy companies with great content, great relationships and innovation.”
It’s been barely a year and a half since online discounter Jet.com was acquired with Mr. Lore at the helm. Mr. Lore has mounted a buying spree since, adding more digital-first businesses to its portfolio, with no sign of slowing down:
- Shoebuy, the pioneering online footwear site founded in 1999 was acquired in Jan. 2017 and renamed Shoes.com.
- MooseJaw, an outdoor gear retailer with ten stores and a digital presence was acquired in Feb. 2017.
- Modcloth, a women’s fashion site was acquired one year ago.
- Bonobos, the men’s fashion site, was acquired last June, with Mr. Dunn brought on board as a key executive.
- Parcel, a New York-based last-mile delivery startup, was acquired last September.
- Uniquely J, Jet.com’s private label grocery brand, launched last October.
- Allswell, an upscale mattress and bedding site created by Walmart, launched Feb. 28.
Simultaneously, Walmart has expanded its tally of store pickup locations to 1,200. Management anticipates adding 1,000 more by the end of the year, Mr. Lore said, extending Walmart’s reach to 100 metropolitan markets by year-end.
Walmart is also repositioning Jet.com, he added. “It will be more curated. We’re targeting urban Millennials, while Walmart.com does better with the middle part of the nation.”
Mr. Dunn encouraged the audience to think about Bonobos and the other digital brands in terms of their “proprietary content.” He added, “These are magical brands, with the ability to draw more people into our ecosystem.”
Mr. Lore confirmed that Walmart is “still in acquisition search mode.” He reasons that it is usually faster to buy operating digital retailers. “It would take too long to develop our own long-tail categories.”
For the acquired brands, said Mr. Dunn, “It’s not about cost synergies from Walmart. It is more about how to play offense — how to build brands in the digital age.”
DISCUSSION QUESTIONS: Do you think Walmart has a coherent digital strategy in place or is it more a set of disconnected measures designed to counter Amazon.com? Will its new and acquired digital brands succeed at attracting and keeping upscale Millennials?