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How Walmart’s Musab Balbale Melds Scale and Innovation

Now 18 months into the job, Walmart’s vice president of merchandising for beauty shared his progress on modernizing the brand matrix of the world’s largest retailer.

Amid a period of rapid changes in consumer behavior, Walmart’s Musab Balbale, vice president of merchandising, beauty, is finding opportunity in evolution.

After 18 months in his new role at Walmart, Balbale spoke at WWD’s Beauty CEO Summit on his goal of making beauty less of an afterthought and more of an imperative for the Walmart shopper.

“When I started, I had a really simple question, which is, is Walmart beauty an oxymoron, can you have Walmart beauty that can really be meaningful? The answer is yes,” Balbale said, in conversation with WWD’s senior editor, Allison Collins. “We are, on so many dimensions, the most accessible retail destination. We have an e-commerce business, maximum reach in stores, and we have a grocery business that’s unparalleled, so our shopper is in stores on a regular basis. Now, there are steps underway to make that pivot from a depot to a destination.”

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The hallmark of Balbale’s tenure has been introducing smaller, indie brands into the brand matrix, epitomized by the launch of Uoma by Sharon C. — the mass-market sister line to Uoma Beauty, founded by Sharon Chuter. “We know that beauty is driven so much by trending newness, and a lot of what you’re seeing is to break into that trending newness,” he said. “The second thing we’re realizing is that the beauty journey starts long before someone steps into the retail ecosystem. Half the customer touchpoints in beauty happen on social media long before she’s thinking about where to buy.”

Walmart’s one-stop-shop value proposition differentiates from specialty retailers and department stores, Balbale said, noting that customers have to make unusually quick purchasing decisions. “[Our shopper] has ice cream in her basket, and it’s melting, and one of the things we have to do at Walmart is make the trip really fast and accessible — not just in terms of price point, but in terms of decision making and simplicity,” he said.

Although Walmart’s e-commerce capabilities are as robust as its brick-and-mortar network, Walmart’s omnichannel approach has only become more complex with last year’s migration to digital in the wake of the pandemic.

“Omni[channel] isn’t just about where she transacts and where she receives her product,” Balbale said, saying that the lines have been blurred by the advent of curbside pickup capabilities. “I know that about 25 percent of my online traffic is actually shopping in stores 24 hours later. She’s building an online basket to get to a store. We’re using our e-commerce ecosystem to facilitate the transaction, but also to facilitate the journey,” he said.

The benefit, however, in terms of the magnitude of Walmart’s reach, is that its beauty customers are also able to shop across price points. “Walmart serves all Americans, so we have customers who are of humble means that are really focused on absolute price. We also have customers that have the luxury of being able to buy at higher price points, so they’re starting to purchase what they can at Walmart,” Balbale said. Adding pricier offerings has worked well in Walmart’s other categories, he added, including brands like Apple for electronics and Reebok for apparel.

When asked about whether Walmart would pursue partnerships with other specialty retailers to build credibility in prestige beauty, à la Ulta Beauty’s partnership with Target or Sephora’s with Kohls, he said he was open to the possibility.

“What I am conscious of is to provide brands, whether it be indie or heritage brands, that are coming up with new innovation at the forefront of beauty,” Balbale continued. “The beauty customer wants to always explore newness. What we can’t be is a specialty retailer or department store. So, we’re starting to experiment with how do we elevate the experience while still doing what we do really well, which is being there for her on a weekly basis. As part of that strategy, we’re bringing in more newness into our aisles, from the heritage side as well as the indie side.”

The game plan for beauty seems to be working. Balbale cited the company’s last earnings call, wherein beauty was said to account for 2 percent of sales, and has been successfully recruiting a younger shopper

“What we’re seeing is it’s resonating, and it’s resonating with new customers,” he said. “If I look at new brands that we’re bringing in, 80 percent of those sales are incremental, and 40 percent of that 80 percent are new to the category. A lot of the new brands are starting to bring customers who haven’t thought about Walmart as a beauty destination, into our aisles.”

Still, there have been challenges for smaller brands navigating Walmart’s immense scale, and Balbale was candid in addressing the issues faced by those with fewer resources.

“It’s really hard on so many dimensions, even new brand founders that come in and talk to you about the frustration that they have with our store operations, the quality of our execution, the challenge in bringing brand awareness fast enough on our platform,” he said, caveating that change doesn’t happen overnight. “If we’re going to make this massive pivot from being a depot to being a destination, we’ve got to do things that start to push. So I am both excited by what I’m seeing from the numbers.”

Because of Walmart’s size, workarounds for brand partners used elsewhere in the industry didn’t have the same efficacy, and coming up with creative solutions is part of his imperative. “With the scale that Walmart has, and the particular drivers of our customer, they don’t allow the solutions that we see elsewhere to just be lifted into Walmart,” he said. “We have to create new solutions because of how the customer experiences the category.”

Balbale has also had to reinvent the wheel in terms of merchandising hair care. The aisles are moving toward integrating hair care for various textures, as opposed to being segregated by traditional versus multicultural offerings. As reported by WWD, Walmart was one of a slew of retailers last year that vowed to take multicultural hair care products out from behind locked cases.

“It’s like having a men’s department versus a women’s department. It isn’t inclusive and we should get ahead of that sort of normative description,” he said. “What we’ve found is that the vocabulary of hair texture is starting a different type of currency, which we can use to explain the differences in the solutions of the products we provide.”

For more from WWD.com, see:

Walmart Raises Full-year EPS Estimates Thanks to Strength in Grocery

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