Walmart to open web mall with Lord & Taylor as an anchor

Discussion
Source: lordandtaylor.com
Oct 20, 2017
George Anderson

Walmart may not be able to take down Amazon.com on its own, but perhaps it can accomplish the feat by banding with other retailers. That strategy, a Wall Street Journal report posits, may be behind the retail giant’s decision to carve out space on its website dedicated to Lord & Taylor.

A deal between the two retailers, which is not yet complete, is a step in the creation of an online mall that consumers would access through Walmart’s site. Walmart-owned brands, including Bonobos, Jet.com, ModCloth, Moosejaw and ShoeBuy, also seem likely to be included.

While Lord & Taylor and Walmart appear to have little in common, the Journal article sees the alliance as a continuation of steps taken by the world’s largest retailer to expand offerings to appeal to a wider swath of consumers, as evidenced by its recent acquisitions.

Walmart reported a 60 percent increase in e-commerce sales for the second quarter. CEO Doug McMillon credited an expanded assortment of products, aided by third-party sellers, on walmart.com. Mr. McMillon said the number of SKUs on the site “surpassed 67 million” during the period.

The retailer is also selling products through Google Express. Marc Lore, Walmart’s e-commerce chief for the U.S., spoke earlier this week at the Journal’s D.Live technology conference about the retailer’s customers ordering via voice-activated assistants such as Google Home. While admitting that many are not comfortable ordering by voice now, he suggested that advancements in artificial intelligence in the years to come will make the activity very much like speaking with an associate on the floor of a store.

Lord & Taylor, according to the Journal, is looking for its association with Walmart to help drive more consumers to its site. The department store’s site attracted an average of 849,000 unique visitors from February through July, compared to 79 million for walmart.com. Amazon averaged 160 million unique visitors a month during the same period.

DISCUSSION QUESTIONS: Do you think Walmart will recruit other retailers to its web mall like it apparently is doing with Lord & Taylor? Will Lord & Taylor and Walmart benefit from cooperating with one another?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"It seems that Walmart is being tremendously creative — and hopefully will be successful — with their approach."
"Boy, Walmart’s PR machine is getting as good as Amazon’s. Good PR but, in the end, who cares?"
"With all due respect to Lord & Taylor, I can’t believe they’re the only retailer in Walmart’s sights."

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21 Comments on "Walmart to open web mall with Lord & Taylor as an anchor"


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Charles Dimov
Guest

It all depends on the financials and potential ROI. For retailers, it makes sense to be in as many locations (physical and online) as possible as long as those locations are bringing in sales — profitably. Walmart has a great opportunity here to shift the game and bring in a more even playing field. All of this is good as long as it drives enough value for the retailers (don’t overcharge them and drive the margins out of the business).

Jon Polin
BrainTrust

With all due respect to Lord & Taylor, I can’t believe they’re the only retailer in Walmart’s sights. It will be interesting to see who else follows. This strategy also starts to illuminate how Walmart will leverage the diverse set of retailers it’s purchased in the past year. While all the industry attention is centered on Amazon, I like Walmart’s innovative moves in e-commerce.

Art Suriano
BrainTrust

Walmart continues to show its ability to think outside of the box. This concept may prove to be successful for many reasons, and I do see it growing beyond Lord & Taylor. E-commerce is still mostly independent sites with customers browsing and comparing. The opportunity to have many retailers available through one website is a tremendous convenience and one I think customers will respond to favorably. Walmart and Lord & Taylor may just be two retailers now, but if this concept grows to many retailers, Walmart will have built the first real shopping center in the cloud. A very wise idea.

Max Goldberg
Guest

I can understand the desire of Lord & Taylor to attract more visitors, and of Walmart to want to take on Amazon, but this alliance seems a bit farfetched. Will Lord & Taylor shoppers really want to be associated with Walmart? While it may drive a few more shoppers, what will it do to the Lord & Taylor brand?

Phil Masiello
BrainTrust

If you throw enough stuff against a wall, something is bound to stick.

Is the strategy to just try and get as much stuff on the Walmart.com site with no underlying focus or strategy? Walmart is not a high-fashion lifestyle brand. So this arrangement lacks any sort of cohesion of brands. It denigrates the Lord & Taylor brand and does nothing for Walmart.

We shall see how this all turns out.

Ken Lonyai
BrainTrust

On the surface, this sounds like a “why not?” kind of experiment with no downside, but web mall concepts are twenty years old and this like those before it, is unlikely to produce substantial revenue — especially for Lord & Taylor.

The idea that Walmart and Amazon are direct competitors is flawed. They overlap in middle demographics, but their core customers are different. Although many Walmart core customers may have Prime, they likely have less than optimal yearly Amazon purchase totals. They are also not the kinds of people to shop much at Lord & Taylor. So really, grasping at straws with these “let’s force an alliance” schemes is not a good strategy.

For its sake, I hope that Lord & Taylor is focused on its own initiatives and not being distracted by this “partnership.” For one thing, their e-commerce/inventory system is still flawed after many years and fixing it is one example of energy better spent to secure their future.

Lee Peterson
BrainTrust

Boy, Walmart’s PR machine is getting as good as Amazon’s. Good PR but, in the end, who cares? If we really wanted to shop Lord & Taylor, which is questionable in the first place, who cares how we do it? In Walmart’s mall or a physical one — it doesn’t matter. What matters is, do we want to shop at Lord & Taylor at all?

Kenneth Leung
BrainTrust

The term “web mall” is kind of misleading … When you buy something on Amazon from another seller, and you are buying from Amazon using Amazon basket and payment, Amazon isn’t “the mall,” it is a shopping experience partner.

From reading this article, this is a screen real estate agreement, i.e., you will be redirected to Lord & Taylor’s website and basket to buy their items and a separate basket for Walmart items. I think that’s the weakness for this agreement if the shopping experience isn’t integrated well. Do customers want to be bounced around between websites for checkout?

Martin Mehalchin
BrainTrust

Great call out Ken. I think this is a big deal strategically and it reveals were Walmart is heading with all the acquisitions from Jet to Moosejaw. But, they have to nail the experience and make it seamless. Amazon delivers that now and for customers to be sticky in the Walmart ecosystem, Walmart and its partners will have to deliver on that ease of shopping and of fulfillment.

Naomi K. Shapiro
BrainTrust

It seems that Walmart is being tremendously creative — and hopefully will be successful — with their approach. Walmart will (should) certainly add others to its mall, to all the participants’ benefit (including Walmart). Don’t make the mistake of thinking Walmart is stuck in its original image. It’s the only company I see that can launch (and succeed) in a successful, mass effort to challenge Amazon. P.S. The dresses in the photo are quite cute, I would buy them, but … they appear to be more expensive than what I would normally pay for a dress — so what happens then?

Cynthia Holcomb
BrainTrust

Lord & Taylor will provide a wide swath of mid-market, mainstream fashion brands to Walmart. This will make Walmart immediately, extremely competitive in fashion from Amazon’s point of view exhibited via Amazon’s private apparel brands and brands selling to Amazon. Lord & Taylor is an experienced apparel merchant of quality brands. This offers a price point Walmart currently has little or no expertise in, let alone vendor relationships (outside of recent acquisitions). I think this is an excellent partnership for both companies. Bravo Walmart and Lord & Taylor! Bring it on Walmart!

Paula Rosenblum
BrainTrust

I know I’ve been quoted on this in an even more public forum, but what the heck are both sides thinking? Where is there any cross-over whatsoever between Walmart and Lord & Taylor customers and, if you were Lord & Taylor, is THIS where you’d go prospecting?

Cate Trotter
BrainTrust

This is an interesting prospect — I’m intrigued to see how it pans out. I certainly think Walmart will be thinking wider than Lord & Taylor, but they’re an interesting pioneering partner. I would love to see the data behind this — is there a lot of audience crossover for example? The success of this idea is going to be in the execution — how easy it is for customers to use, how convenient, etc. Online shoppers are used to the ease of Amazon, if this idea is too complicated or has a lot of steps then it may well struggle. Still, I like Walmart’s forward-thinking approach.

Camille P. Schuster, PhD.
BrainTrust

Walmart finds itself caught in a Catch 22. Walmart started with a strong sense of the target consumer and created a slogan that provided a strong image for the brand — low prices always. That segmentation and branding strategy was wildly successful. Walmart has wanted to expand their target market for a long time and has tried several approaches including a change in product assortment, a change in store format, a change in slogan (although the new slogan also emphasizes low prices) etc. None have succeeded because they do not resonate with the original target market and branding strategy. Now they are partnering with Lord & Taylor to attract a new target market. Success is highly questionable because this retailer does not fit with the original segmentation and branding.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
2 years 24 days ago

Walmart is aggressively trying to play catch-up with Amazon by expanding its product breath on its online marketplace. We will likely see a lot of other retailers added to its web mall – retailers that offer products not currently available at Walmart.

While it is a potentially risky move for Lord & Taylor from a brand image perspective to be associated with Walmart, they expect to capture incremental sales with online exposure to a wider audience.

Online marketplaces are making shopping convenient for consumers. If they can go to one website and compare prices across several retail offerings, it makes shopping easy and they feel like they are getting the best price. According to industry studies, more than 50% of consumers start their product searches on Amazon. Walmart would like consumers to think of its web mall as their product search starting point. The battle between Amazon and Walmart is heating up!

Harley Feldman
BrainTrust

Walmart will recruit other retailers to the growing Walmart Marketplace. It will be similar to the Amazon Marketplace but with the enhanced possibility of delivering other retailers products to a Walmart or their own stores. Since Amazon is really a logistics company, Walmart is moving in parallel to the same effect. This means that it does not matter what sells on their website, only that the product needs to be delivered to the consumer. Both retailers will benefit from this partnership — more eyeballs on Lord & Taylor products, and Walmart having a broader product line on their website.

Ricardo Belmar
BrainTrust
While web mall concepts are not new, I’m really enjoying seeing how creative Walmart has become in the last year. First a series of acquisitions we all questioned the logic behind, followed by a series of innovative omnichannel initiatives in the store and via mobile, and now a web mall concept with no less than Lord & Taylor! Very creative, and we’re finally starting to see the strategy behind those fashion brand acquisitions. When we think of a mall, we have to put it in the context of a target demographic. If you add Bonobos, ModCloth, Moosejaw, ShoeBuy, and now Lord & Taylor, what do you get? A very different customer set than the traditional Walmart customer. Walmart isn’t looking to expand its existing base, they’re hoping to attract a completely new customer base that may just steal shoppers away from Amazon Prime! The key I believe is how Walmart chooses to brand this web mall. It will need to stand apart from Walmart’s existing brand to leverage the brand cache of its acquisitions and… Read more »
Larry Negrich
BrainTrust

As Walmart.com increases its site traffic numbers to a range closer to Amazon, retailers will feel the need to participate just as they have with Amazon. Walmart.com becomes another channel, a major online anchor for retailers to leverage.

Craig Sundstrom
Guest

Uhm….what? The “web mall” idea is fine, and really isn’t that what Amazon is, considering how many outside vendors are on its site? But starting with L&T is … I don’t really have a word for it.

I’m going to wish them well and file this under the “so crazy it might work” file for now.

Kai Clarke
BrainTrust

It is important to note here that website locations do not equate increased website presence. Buying more websites does not change the way that consumers come to a website any more than simply listing the same products on Walmart’s website. Consumers do searches on general web search engines (like Google), and this is where Walmart needs to establish website “share of eyeballs” first. Then build on this with a strong intrasite web shopping engine like Amazon shopper. Walmart needs to understand the basics of listing a product on their website, compared to buying another site just to get the products listed.

Alex Levashov
Guest

Looks like an interesting experiment and probably not the last in this space for Walmart. They areaggressively trying to catch up with Amazon and test different methods.

What will it bring to Lord & Taylor? Intuitive answer that, not that much, due to perceived low price stigma of Walmart. However there is a segment of people who don’t want to overpay for basic things like pasta and ketchup, but will buy premium clothes. So I think that executed well, L&T webmall may work.

wpDiscuz
Braintrust
"It seems that Walmart is being tremendously creative — and hopefully will be successful — with their approach."
"Boy, Walmart’s PR machine is getting as good as Amazon’s. Good PR but, in the end, who cares?"
"With all due respect to Lord & Taylor, I can’t believe they’re the only retailer in Walmart’s sights."

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