By Suzanne Kapner and Sarah Nassauer
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 20, 2017).
Wal-Mart Stores Inc. is near a deal to add Lord & Taylor to
its website, part of a broader effort by the retail giant to build
an online shopping destination that can compete with Amazon.com
Inc., according to people familiar with the matter.
Wal-Mart, seeking to ramp up e-commerce sales after years of
sluggish growth, wants to turn walmart.com from a discount site
into an online mall that would also feature higher-end brands, the
people said. For Lord & Taylor, the alliance could bring a
boost in web traffic at a time when fewer shoppers are visiting
department stores.
Additional brands that eventually could be included in the
project include men's clothing company Bonobos and online retailer
Jet.com, both of which are owned by Wal-Mart, as well as other
traditional chains, one of the people said. Financial terms of the
potential Lord & Taylor partnership couldn't be learned.
Last year, Wal-Mart bought Jet, placing its founder Marc Lore at
the head of U.S. e-commerce operations. Then Wal-Mart made a series
of smaller e-commerce purchases including Moosejaw, Bonobos and
ShoeBuy, both to expand its online selection and gain access to
brands built online, executives have told investors.
Now Wal-Mart aims to make walmart.com more attractive to premium
brands and high-income shoppers, an area Amazon has also pursued in
recent years.
Amazon didn't respond immediately to a request for comment.
Over the next year, Wal-Mart wants to "elevate the Walmart.com
brands," Mr. Lore said last week. The changes include using blue
branded boxes to ship walmart.com orders, redesigning the website
and working on partnerships to gain access to more premium
products, Mr. Lore said.
Last month, Wal-Mart said Denise Incandela will become its head
of fashion for U.S. e-commerce. Ms. Incandela was most recently
chief executive of shoe company Aerosoles and is the former
president of digital for Ralph Lauren and chief marketing officer
for Saks Fifth Ave.
Amazon has made an aggressive push in recent years to win over
fashion brands. It scored a coup in June when Nike Inc. agreed to
sell some of its products directly to the e-commerce company, and
over the years it has reached agreements with department store
stalwarts such as Calvin Klein, Kate Spade and Levi Strauss.
Amazon has also extended its reach into physical stores, buying
grocer Whole Foods, and striking a deal with department store
Kohl's Corp. that lets shoppers return goods bought on Amazon at 82
Kohl's locations.
Wal-Mart is framing itself as the only e-commerce operation that
will be able to challenge Amazon directly, even though its website
draws about half as many monthly U.S. visitors, according to the
research firm comScore.
"Wal-Mart is positioning itself as a clear No. 2 in the space,"
said another person familiar with the discussions.
Like other department store chains, Lord & Taylor, which is
owned by Hudson's Bay Co., is struggling with sluggish sales and
declining foot traffic. Sales at Hudson's Bay's department store
group, which includes Lord & Taylor, fell 1.6% in the three
months to July 29.
Joining with Wal-Mart would help draw shoppers to Lord &
Taylor's website, which attracted an average of 849,000 unique
monthly U.S. visitors from February through July, according to
comScore. That compares with 160 million for Amazon.com and about
79 million for Wal-Mart.com.
Smaller brands and retailers are wrestling with how to balance
exclusivity with the need to grow online as Amazon and Wal-Mart get
bigger, said Roshan Varma, vice president in the retail practice at
AlixPartners, a consulting firm. "It's a little bit of a prisoner's
dilemma. Are you going to defect or stay on your own?"
Higher-end brands have shied away from joining with Wal-Mart
because of its discounter roots. But several brand executives said
they need to rethink their approach to compete in a world
increasingly dominated by Amazon.
Under the plan, walmart.com would give Lord & Taylor
dedicated space on its website, but Lord & Taylor will continue
to operate its own website. In the future, shoppers ordering from
lordandtaylor.com would be able to pick up and return items at
Wal-Mart's 4,700 U.S. retail stores, said one of the people
familiar with Wal-Mart's impending deal with Lord & Taylor.
Wal-Mart executives said in recent weeks the company is working to
allow returns from third-party online sellers at U.S. stores.
The department-store chain will own the inventory and fulfill
orders from the site. "The only difference," the person said, is
that it happens to be on walmart.com."
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Sarah
Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
October 20, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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