Walmart.com is going narrow and deep, diving into fashion categories such as apparel, shoes, accessories and jewelry, according to Marc Lore, who joined the company in September as president and chief executive officer of U.S. e-commerce after the web site he founded, Jet.com, was purchased by Wal-Mart Stores Inc. for $3.3 billion.
Since then, Lore has expanded the Bentonville, Ark.-based retailer’s thinking to include selling higher-priced products while elevating its taste level and aesthetics with an emphasis on design.
“We’re doing acquisitions primarily in specialty areas that can help accelerate our business in long tail categories,” Lore said during a Baird Global Consumer, Technology and Services conference on Wednesday. “They’re the high-margin categories where we’ve made a couple of acquisitions already.”
Wal-Mart began a buying spree in January, purchasing apparel and accessories site Shoebuy for $70 million; outdoor-focused apparel and footwear e-tailer Moosejaw in February for $51 million, and Modcloth.com in March for an undisclosed sum. Lore hired the sites’ respective ceos to operate the properties.
Those acquisitions gave the retailer more than just access to additional products. “We got access to great merchants. We gave the keys to those categories to the ceos [of each business] across Wal-Mart and Jet.com, so it really bolstered the experience in those categories. We’ll continue to do that. We’re exploring digital-native vertical brands.”
The ceo has deflected inquiries about rumors that Wal-Mart is on the verge of buying Bonobos. Lore wasn’t asked the question at Baird, but said small specialty players such as Modcloth “can help accelerate our entry into the long tail and give us access to product you can’t find anywhere else. We’ve gotten access to relationships with thousands of brands with really rich product content and pictures. That helps elevate the positioning of Wal-Mart and Jet and also comes with great margins.
“I think a lot of the heavy lifting is going to be creating really specialized shopping experiences by micro-category,” Lore added. “We’ve perfected all the details. Now we’re hiring specialists focused on very narrow categories and just trying to crush it.”
Wal-Mart recently hired five-time Olympic gold medalist swimmer Nathan Adrian as the category specialist for competitive swimwear. “Nobody knows competitive swim products better than a competitive swimmer that’s not only an Olympian. We’re hiring for a very narrow field to make sure we have all the assortments priced right and merchandised right.”
It’s a big change in strategy for a retailer that until recently was focused on Every Day Low Price for a barrage of commodity items.
Lore said Wal-Mart is continuing to quickly add third-party sellers to its platforms, which includes dresses by Giorgio Armani Collezioni, Ralph Lauren, Alice + Olivia and Monique Lhuillier, priced from $250 to more than $800. “It’s really about getting the right products as opposed to quantity over quality,” he said.
Dan Makoski, vice president of design at Wal-Mart U.S. e-commerce, on Wednesday put out an open call to the design community, touting the retailer’s new site, designforlivingbetter.com.
“Design has a unique role to play at Wal-Mart, tying together our obsessive focus on the customer, our global scale and our efforts to have purposeful impact in the world,” he said in a letter posted on Twitter. “Our team’s manifesto is ‘Design for Living Better,’ and today we’re launching this site to share what this means to us and invite other designers to join us in making it tangible in the world.”
Makoski, who worked at Microsoft, Google and Motorola before joining Wal-Mart, said, “We’re taking steps to create an environment in physical stores that’s a little more aspirational and easier to shop. It would be like walking into a store that could rearrange itself into the kind of aisles and products you’re interested in. There’s a little bit of personalization today. Of course, I want to make [stores] beautiful.”
The retailer revamped design team functions and is changing its approach from traditional design thinking to the more inclusive co-designing, to involve designers, product managers, developers, business stakeholders and customers.
Next Gen stores feature interactive projection technology on tables and walls, interactive screens at the ends of aisles offering a vast array of online-only items and a shipping container that looks like a big vending machine, where customers scan a code on their phones to pick up fresh and frozen orders in locations where Wal-Mart doesn’t have stores.