Walmart’s ecommerce strategy appears to be shifting from acquiring brands that appeal to millennials to creating an in-house brand targeting Gen Z.
According to a Business of Fashion report, Walmart is developing its own in-house basics online-only brand that emulates Everlane, but at a lower price point. Andy Dunn, the founder and CEO of Bonobos—which Walmart acquired in 2017 for $310 million—who has also assumed the role of svp, digital consumer brands at Walmart ecommerce, is in charge of developing the new brand.
Everlane is known for basic, mid-end clothing, like T-shirts starting at $15 and $100 cashmere sweaters, a somewhat higher price range than retailers like Target. And retail experts aren’t sure Walmart’s move is the right one, as Everlane’s business model is primarily built on “transparency” and letting customers know where its products are coming from, how they are made and why they’re priced the way they are.
“Walmart has to create its own brands, but I wonder if it’s just not going to [be the] right fit,” said retail consultant Bruce Winder. “I think there could be a disconnect if they hold true to the Everlane DNA.”
Some of that Everlane DNA includes cashless checkout in its San Francisco and New York stores and the “pay what you want” model that lets customers choose from three different prices to buy certain items. (Everlane chooses the products and sets the prices.) The business strategy is a big part of Everlane’s ethos, and it’s not necessarily one Walmart can—or should—follow, Winder said.
“Walmart will look [like it’s] trying to appease Gen Z and Gen Y,” Winder said. “That’s a genuine risk.”
Winder does think Walmart needs to create more brands to compete with Amazon and stay relevant, but he said this move is “a big gamble” for the retailer and that “it almost looks like Walmart has a bit of an identity crisis.”
Walmart declined to comment for this story.
While Walmart’s ecommerce strategy appears to be all over the place with the acquisitions of Jet.com and Modcloth as well as the debut of other in-house brands like sleep line Allswell and women’s plus-size fashion line Terra and Sky, the company reported in its May earnings report that U.S. ecommerce sales were up 63 percent.