Secaucus, New Jersey –– The dedicated apparel space inside Walmart’s “store of the future” looks more like a department store than a major chain store.
Gone are the giant “Everyday Low Price” signs advertising the $4.99 shirts, replaced by tasteful campaign images and mannequin displays, but the prices remain attractively low. Instead of just fluorescent lights, the hallways are lit with soft, focused light that highlights the products and encourages shoppers to linger on the racks and peruse the blouses, blazers, and printed dresses.
Over the past few years, the world’s largest retailer has added more than 1,000 new brands to its apparel offering, including Reebok and Levi’s, and overhauled its internal product offering. Walmart is collaborating with designer Brandon Maxwell on two private labels, and in addition to its usual assortment of plain T-shirts and sweatpants, it’s offering trendier, seasonal items like fleece jackets and ankle boots. are also on sale.
None of these additions are particularly innovative. But these changes are a milestone for Walmart, which has struggled for decades to be seen as a fashion destination despite being one of the world’s largest apparel sellers thanks to its cheap everyday staples. It is considered to be a
The goal is for younger fashion customers who already buy eggs, laundry detergent, and underwear at Walmart, but previously never thought to put their office clothes and night out clothes in the same cart. It’s about attracting sensitive customers.
“100 million people visit our stores every week and 40 million people visit us online,” said Dennis Incandera, Walmart’s executive vice president of apparel and private brands. “So far, we have supported her basic needs, but our goal here is to further support her closet needs.”
Whether Walmart can truly transform the apparel category is an open question. While its biggest rival, Target, has successfully rebranded itself as an affordable fashion store by collaborating with designers and offering affordable yet trendy products, Walmart has Going back, there is a long history of failed attempts to change the clothing range.
Various private brands have come and gone. In the early 2000s, the retailer built his 100-person product development team and scoured Europe for fresh trends, most of which didn’t catch on with customers. Walmart acquired Bonobos and a number of other trendy direct-to-consumer brands in the 2010s, but never found a way to market these clothes to utilitarian shoppers. The company sold Bonobos last year for $75 million, less than a quarter of what it paid to acquire the brand.
So far, shoppers have embraced the latest initiative. Walmart doesn’t disclose apparel sales figures in its earnings report, but it shows the category has been growing in recent months. Online third-party marketplace sales for the apparel category in Q2 2023 recorded double-digit growth compared to his 5.7% growth overall.
However, past rebranding also initially resulted in increased sales. And the fashion market is only going to get tougher.
“It’s difficult to be a true fashion destination while maintaining an affordable price point,” says Sonia Lapinski, fashion leader at consultancy AlixPartners. “At the same time, there are so many pressures and competitors in the fashion industry. Not only Amazon, where people are now very comfortable buying fashion, but also digital players that offer very affordable prices. The same is true.”
For Incandera, a luxury brand veteran who took over Walmart’s fashion division in 2021, these changes are an opportunity, not a threat.
“When you think about Millennials and Gen Z, our research shows that people care less about where they buy the product and more about buying a great product with great value at an extraordinary price point. I understand,” Incandera said. “So I think consumer behavior has changed and they’re open to shopping in different places that didn’t exist before.”
difficult category
Walmart was the largest apparel retailer in the United States for many years until it was dethroned by Amazon in 2021. But Capital’s F-fashion, the clothes you want rather than the clothes you need, has always been the company’s white whale.
The Arkansas-based chain has invested repeatedly in refreshing its apparel assortment since at least the 1990s, leveraging a revolving door of designers and retail executives. Norma Comali and Max Azria were also among the talents who passed.
Licensed from talk show host Kathie Lee Gifford, the lucrative private label landed at Walmart in 1996, sparking controversy after human rights activists accused the TV star of forcing her to work in sweatshops. Brewed. This line was phased out in his 2003 year.
The company introduced its UK-based contemporary fashion line George in 2002 and received positive headlines, but the brand’s international recognition never translated into sales in the United States. The private brand was eventually discontinued and relaunched as a men’s brand in 2018. That same year, Walmart closed its White Stag and Faded Glory private labels to make room for new brands like Thyme and True Wonder. Nation and Terra & Sky.
Time and Tru is now a more than $2 billion company, the company said. But for Walmart, which had $573 billion in sales last year, this counts as a small success. By contrast, Cat & Jack, a children’s line launched in 2016 by much smaller Target, achieved $2 billion in annual sales within a year.
Walmart also sought to acquire some of its own cool, acquiring digital startups Bonobos, ModCloth, and Eloquii between 2016 and 2018. Retailers didn’t actually stock the brands, they followed trends more closely and sold them at higher price points. Bonobos was never available in Walmart stores, although some stores briefly offered Bonobos Fielder as a more affordable “Street Leisure” sub-brand. ModCloth was sold in his 2019 year. Eloquii and outdoor apparel brand Moosejaw exited this year shortly after Bonobos. (Walmart said the portfolio of digital brands is intended to bring expertise in-house, inform Walmart.com’s growth and help hire design talent.)
For its latest fashion makeover, Walmart is returning to private label. Womenswear includes Scoop and Free Assembly designed by Brandon Maxwell, as well as a denim-forward fashion line in partnership with Sofia Vergara, and former Millie designer Michelle Smith and renowned SoulCycle. There is an activewear line called “Love & Sports” created by instructor Stacey Griffiths. .
Cowen analyst Oliver Chen said the retailer is well-positioned to launch a new approach to the fashion industry as it has grown and become more profitable post-pandemic. Fashion products, especially those designed and manufactured in-house, have much higher profit margins than agricultural products or everyday household items. And as inflation continues to weigh on consumer spending, Walmart has an opportunity to gain more market share with its low prices and steady in-store traffic.
“They have great cash flow and already have customers coming in for the basics,” Chen said. “Fashion has always had big opportunities, and now is the time.”
chance
Incandera, who joined Walmart in 2017 as head of fashion e-commerce, is uniquely positioned to succeed, Chen added. One of her biggest contributions as head of digital fashion is that she introduced a more robust third-party marketplace, which now includes Coach, Lands Her End, Michael Her We have thousands of different brands, including courses.
Incandela has a background in the luxury sector, previously serving as chief marketing officer at Saks Fifth Avenue, which means she has the expertise to elevate brands (Incandela is Ralph He was also President of Global Digital at Lauren).
“Part of their secret weapon is Dennis,” Chen said. “She has a very broad and strong background and brings both magic and logic. She has a deep understanding of merchandising and branding, and is also an operator.”
For example, under Mr. Incandera’s watch, the fashion department has reduced inventory by 10 percent in order to make featured items more appealing. The aisles are also wider, and each store has its own visual merchandiser to dress up new mannequins and keep the assortment fresh. Online, Incandela has incorporated virtual try-on and fit prediction tools.
But Walmart’s biggest strength is the egalitarian nature of Gen Z consumers when it comes to clothing purchases, a trend that will increase competition for Walmart and allow it to enter the space like never before. make it possible.
Chen said that while older shoppers may have a certain impression of Walmart, “younger customers may be more receptive to Walmart’s current makeover.”
“Gen Z likes to mix and match. For them, getting something expensive is fashionable,” he added. “Being chic now has more to do with your personal style than how much you spend.”
Walmart’s future store plan calls for 700 of its 10,500 stores to be renovated, with 300 expected to be renovated by the end of the year.
Even in these modernized, fashion-forward stores, about 65 percent of the clothing assortment is still the retailer’s basics, or necessities. Six of Walmart’s private label brands already generate more than $1 billion in annual sales. Many Walmart shoppers live in rural and suburban America and are less interested in TikTok and runway trends than urban shoppers. It’s difficult to create stylish products that don’t alienate your core customers.
Incandera said the retailer isn’t suddenly stocking sequined gowns and cutout bodysuits or trying to follow Internet trends at lightning speed.
That’s why we have Shane. Or even TJ Maxx.
“A very fashion-forward assortment, that’s not our goal,” Incandela said. “We focus on the majority of her closet, providing high-quality clothing that will last for years.”