WMT Walmart Inc

By Sarah Nassauer 

On Black Friday weekend Wal-Mart Stores Inc. is hoping some shoppers trade up from half-price pajamas and $1 DVDs. The retailer is also pitching $18,000 Cartier watches, Prada pumps and other high-price gifts on its website.

Walmart.com has jumped from offering about 8 million products earlier this year to over 20 million, in large part due to an aggressive pursuit of third-party sellers, outside companies able to sell products through Wal-Mart's website. That has given Wal-Mart access to luxury items that can attract a long-elusive group: higher-income shoppers.

Marketplace sellers have "been able to bring on some brands that Wal-Mart hasn't traditionally had in the past," said spokesman Dan Toporek, but Wal-Mart isn't changing its core strategy of low prices on things people buy every day. Wal-Mart declined to say how many people are buying the priciest items on Walmart.com.

In September, Wal-Mart bought online discount retailer Jet.com Inc. for $3.3 billion, in part because "Jet has been able to attract some brands we don't have at Wal-Mart," and draw in more urban millennials, Wal-Mart CEO Doug McMillon said in August. Jet.com already sold products from brands like Coach and Michael Kors, also often through third-party sellers.

Luxury goods are sold online through third parties for a wide variety of reasons, either because manufacturers are more comfortable selling to niche players or because the goods are passing through wholesalers or distributors. In some cases, brands have little control over where their goods ultimately end up and at what price.

For years, Wal-Mart has struggled to convince premium brands to sell their wares directly on Walmart.com, said former employees from the company's San Bruno, Calif., e-commerce headquarters. High-end brands often doubted Wal-Mart's shoppers would buy their products or worried Wal-Mart could tarnish their reputation for being exclusive, these people said.

Amazon.com Inc. has also had to battle to attract luxury brands but it has rapidly attracted shoppers in part by using third-party sellers to increase its offerings to hundreds of millions of items for sale, including Cartier watches and other high-end goods.

Now, Wal-Mart and other retailers -- including Saks Fifth Avenue, Macy's Inc. and Crate & Barrel -- are following suit. Third-party sellers offer retailers other benefits, boosting selection often without having to own or ship the inventory.

Customers who shop on Amazon and are members of Prime, Amazon's free-shipping membership program, live in households earning an average of $81,100 a year, according to data from Kantar, a consultancy. That figure falls to $58,800 for Amazon shoppers who are not Prime members, still higher than the $57,600 average for Walmart.com shoppers.

Wal-Mart's website customers are more likely to be parents, younger or consumers with slightly higher incomes than store shoppers, Wal-Mart executives say.

The addition of more third-party sellers comes as Wal-Mart continues to court some premium brands to list items directly on its website.

For BabyBjorn, the Swedish baby-gear brand, that courtship started years ago, said Jim Haluska, senior vice president of sales and marketing for BabySwede, the brand's North American distributor. Wal-Mart upgraded its baby department in stores and online last year, attracting other higher-end baby brands. That convinced BabySwede that Wal-Mart and its customers were ready for its $150 baby seats and other products, said Mr. Haluska.

For now, the brand's priciest products are only on Walmart.com, not in stores, said Bridgette Kovacevich, marketing manager for BabySwede.

"People looking for a high-end cradle aren't going to say I should go to Wal-Mart for that," she said, "but they will go to Walmart.com."

Write to Sarah Nassauer at sarah.nassauer@wsj.com

(END) Dow Jones Newswires

November 24, 2016 07:14 ET (12:14 GMT)

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