Wal-Mart’s buying spree seen as way to enhance online capabilities, acquire ‘aspirational’ brands

The world of online commerce is much akin to the wild, wild west and the sheriff in town being Amazon.com has pretty much controlled the pace of growth for other retailers trying to establish a following of their own.

Walmart.com continues to test and learn by taking pages from Amazon’s playbook and tweaking them to fit the Wal-Mart way, something founder Sam Walton did often when he was building his brick and mortar empire.

On Tuesday (Feb. 14) the Bentonville-based global retailer announced a $51 million acquisition of Moosejaw, an online specialty outdoor retailer. Wal-Mart announced Jan. 5 the $70 million purchase of specialty online retailer ShoeBuy.

Analysts see this shopping spree by Walmart.com as one way the retailer is trying to enhance and build better online capabilities while also taking a deeper dive into some categories that resonate with Millennials. Kenji Gjovig, executive with Content Analytics based in the heart of Silicon Valley, said the deals are good for Walmart.com as it allows the company to pivot and expand capabilities they might not otherwise have.

He said Wal-Mart is widely known as mass retailer that does a good job covering the basics, but they don’t offer higher end brands because they don’t fit the retailer’s low-cost model. Gjovig said the ShoeBuy and Moosejaw deals give Walmart.com an opportunity to reach customers who want the “best-in-class” products.

Gjovig has heard the recent organizational changes underway in Walmart.com will include overlapping expertise from Hayneedle in the Walmart.com home category and he believes the same will happen for footwear with ShoeBuy and outdoor products with Moosejaw. He expects Walmart.com customers will see changes to the merchandise available in these categories in the weeks and months ahead.

“Walmart moves its buyers around and these merchants do a great job learning their categories but it’s doubtful there is the deep category experience that can be found in speciality stores. Now Walmart.com will have that,” he said.

TECHNOLOGY GAIN
Aside from the category expertise, he said technology is something Walmart.com will improve from the acquisitions. In particular he liked the 360 degree view option for items sold on Moosejaw. He said that provides a better customer experience and the Moosejaw site is also rich with content information on the merchandise being sold, an area on which Walmart.com is still working. There is also chat box function that allows for instant price-checking on the Moosejaw site and that also likely resonated with Walmart.com management.

He said some retailers are experiencing with chat boxes on their e-commerce sites and that’s is totally about enhancing the customer experience.

“Being able to ask questions and get immediate answers on the merchandise is like being in a store and speaking with a sales associate, but you never have to leave home. The price check feature on the site is also very much in line with Walmart who’s been a longtime price matcher,” Gjovig added.

Ken Cassar, principal analyst with Slice Intelligence, said Wal-Mart is establishing a pattern of buying an array of retailers all of which offer strong plays.

“Assuming that Walmart keeps these brand identities intact, the future of Walmart might look like some of the apparel holding companies, like VF and PVH, which could be interesting,” Cassar noted in a RetailWire blog post on Thursday.

Keith Anderson, senior vice president of strategy and insights at Profitero, told Talk Business & Politics the move helps Wal-Mart move to “aspirational” brands.

“It’s another category specialist with access to aspirational and premium brands, a deep assortment and some organic search authority. Moosejaw is a also a well respected brand itself, as a retailer,” Anderson said.

On a cautious note, Anderson said like ShoeBuy, Moosejaw appears to have been struggling to grow profitability as an independent player.

DON’T FORGET CORE CUSTOMERS
Jason Long, CEO of Shift Marketing in St. Louis, told Talk Business & Politics, Moosejaw appears to be a good deal for Walmart.com. He said consumers who shop Moosejaw are likely loyalists who crave high-end merchandise and the cache of dealing with a specialty retailer in the space – likely an audience Walmart.com or Amazon.com might not already have. He said time will tell if the deal is worth the purchase price, but he believes it is.

“Niche sites draw consumers in the same way craft beer does, but when a Miller buys a craft beer it somewhat waters down the uniqueness of it. Walmart.com will have to be careful not to do the same with Moosejaw and ShoeBuy,” Long said. “This sort of feels like when Amazon.com bought Zappos, they were careful not to tamper with the Zappos vibe and it’s paid off.”

He said Walmart.com can learn a few things from a hip niche player like Moosejaw, but it will also be important that Walmart not forget its core customer, a mistake made several years ago with Project Impact and the retailer’s attempt to look more like a Target store.

“My grandfather still expects to find a $7 flannel shirt at his Walmart store and that core customer is the retailer’s bread and butter,” he added.