Why Walmart’s developing digitally-native brands

Stewart Samuel
Program Director - Canada

Date : 08 February 2019

As Walmart launches another online-only, or digitally-native brand (DNVB), we look at how this aligns with its broader ecommerce strategy.

Home furnishings range featuring over 650 products

MoDRN is the retailer’s newest addition to its growing collection of digitally native brands. The home furnishings brand, comprising of three collections - Retro Glam, Refined Industrial and Scandinavian Minimal – features almost 650 products. The range, which incorporates high quality materials, has been developed to replicate the elevated look and feel typically associated with specialty stores.

Source: Walmart

Walmart’s first digitally-native brand

This follows on from the launch of Allswell last year, Walmart’s first digitally-native brand. Comprising of a range of mattresses and bedding, the collection is sold exclusively on AllswellHome.com. The mattress-in-a-box concept competes with several online specialists which have grown at pace over recent years. The website has the look and feel of an independent brand, with no reference to its relationship with Walmart. The company was set up as a separate unit, led by president, Arlyn Davich, with a focus on ensuring a design-centric approach.

Reaching new customer groups

Walmart has gained expertise with digitally-native brands following its acquisition of Bonobos in 2017. The menswear retailer’s former CEO, Andy Dunn, was appointed at the time to lead Walmart’s operations in this area. While Bonobos has been able to optimise Walmart’s scale, its has remained independent, enabling Walmart to learn how to build and scale-up digitally native brands, the role of digital marketing and storytelling and how to reach new customer groups which would not typically be Walmart customers.

Elevating the online customer experience

The retailer has also acquired ModCloth and Eloquii to add to its online-only brands. These brands, along with in-house developed ranges such as MoDRN and Allswell are an important part of Walmart’s future. They help to create a point of difference, will elevate its focus on the customer experience across all its online properties and enable it reach to younger shoppers, especially millennials and digital natives.

Improving the economics of ecommerce

These brands are also an important element of improving the economics of ecommerce. Vertical brands typically have much higher gross margins and deliver to the bottom line as they scale up. They are also data rich as everything is undertaken in-house, enabling the offer to be continually refined and improved. Further acquisitions are likely in the future as Walmart builds-out is repertoire of brands, supporting its longer-term vision for its ecommerce business.

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