The world of stores that have everything just keeps getting more and more interesting. Walmart recently went on a run of aggressively acquiring startup after startup, presumably arming themselves to fend off Amazon for the long-term. The recently announced hiring of Saks Fifth Avenue ecommerce veteran Denise Incandela also fanned the flames that Wal-Mart may be a serious suitor for Nordstrom.
What did we expect?
Amazon has been moving in on Wal-Mart’s turf for nearly two decades, and Wal-Mart’s reaction has largely been a series of tepid rebrandings.
When Amazon bought Whole Foods, it was a direct assault on Wal-Mart on multiple fronts. Not only did Amazon act on its intention to enter the fresh produce and grocery industry, it also acquired a series of 365+ physical locations.
This wasn’t just an unsettling piece of news, it was a threat to Wal-Mart’s long-term existence.
Once the dust settled, everyone fixed their eyes on Wal-Mart’s next move. Wal-Mart didn’t grow into a $243 billion market cap business by inviting competition and doing nothing about it.
Wal-Mart aims to compete with Amazon for the long-term and overcome their down home discount warehouse brand identity by aggressively building their digital assets. Here are a few of Wal-Mart’s recent acquisitions:
Wal-Mart threw the gauntlet into the eCommerce ring with its $3.3 billion acquisition of Jet.com, an Amazon competitor. It’s clear that this acquisition set the groundwork for Wal-Mart’s recent digital success. Walmart’s eCommerce sales exploded with a 63% rise and a 69% rise in digital gross merchandise volume. Additionally, same-store sales grew 1.4% and traffic to the stores rose 1.5%.
Wal-Mart bought Shoebuy, an online shoe retailer for $70 million. This is a direct challenge to Zappos, one of Amazon’s prize possessions. Wal-Mart even dished out a cool $9 million for the Shoes.com domain to redirect traffic to its new Shoebuy site.
In February, Wal-Mart bought Moosejaw, an online outdoor retailer, for $51 million.
In March, Wal-Mart bought Modcloth, an online women’s apparel shop, for around $40 to $60 million.
Wal-Mart agrees to buy Bonobos, the trendy men’s wear company, for $310 million.
The New “Wal-Mart Customer”
Traditionally, Wal-Mart tends to attract demographics that are less wealthy and older than those that shop at its competitors, such as Amazon and Target. While “savings” has been a major component of the Wal-Mart branding, it seems Wal-Mart recognizes a need to change, ignoring the voices of opposition.
“Through the acquisition and our scale, by leveraging cost of goods, by leveraging some of our transportation efficiencies and our shipping rates, we can apply those toward these newly acquired businesses and help them continue to grow, and at the same time we bring in their expertise." -Ravi Jariwala, senior director of public relations at Wal-Mart.com
Wal-Mart isn’t purchasing these start-ups to absorb them into the Wal-Mart brand. It is building a stable of premium brands whose younger, more affluent customers can be combined to compete with Amazon on an even playing field. Wal-Mart’s distinct acquisition run might not change how people view the traditional “Wal-Mart,” but it may change what “Wal-Mart” really is.
Onestop Internet provides full-service ecommerce solutions to branded manufacturers. As an extension of their ecommerce and performance marketing teams, Onestop monitors and advises on how to navigate the competitive challenges of the new retail landscape. Download the latest Onestop eBook, Tribulations of Trial: New Strategies for Acquiring New Customers.