ModCloth knit tops and Naked Poison II (2002)vibrant Bonobos pants aren't the sort of items you'd expect to find in the sales racks of a Walmart Supercenter.
Both brands cater to urban millennials with hip fashion sensibilities and steep price tags that suggest a style tier above your average big-box store.
Yet their loyal customers must now begrudgingly count themselves as Walmart shoppers, thanks to the retail giant's acquisitive appetite.
SEE ALSO: Google and Walmart team up to take on a common enemy: AmazonLong the proudly uncool symbol of American middle-class consumerism, Walmart is now on a high-end shopping binge that suggests a departure from its pedestrian mass-market roots. The Modcloth and Bonobos acquisitions are just the two most high-profile deals in a litany of trendy e-commerce brands the world's largest retailer has absorbed in recent months.
Premium outdoor equipment site Moosejaw, home goods website Hayneedle, and online shoe warehouse ShoeBuy.com have all joined the Walmart umbrella in the past year. Walmart is also rumored to be in talks with cosmetic subscription delivery service Birchbox.
Like most of what happens in the retail world these days, the surprising turn can be explained in one word: Amazon. Walmart is frantically bulking up its online operation in a bid to stay competitive with the online shopping juggernaut. And it's efforts have finally started to pay off in the form of breakneck growth in web sales.
The push isn't just about ushering Walmart's existing customer base online, though. The chain must also win over shoppers who already reliably buy that way. Those people tend to be younger, wealthier, and, in some cases, more distrustful of or resistant to Walmart's yellow smiley than the typical store patron.
To overcome that image problem, the latest additions to Walmart's brand stable will be wrapped in a new banner, that of its subsidiary, Jet.com. The former startup, which Walmart bought for more than $3.3 billion last year, is the crown jewel of its recent acquisition spree, an all-encompassing retail site that ambitiously took aim at Amazon with a cutting edge price algorithm.
Jet.com may have drifted from its original "Costco-of-the-internet" strategy since its 2015 inception, but it's purple, tech-ish logo suggests a more forward-thinking company without the baggage of Walmart's reputation in the mind of most consumers.
Walmart execs confirmed in a recent earnings call that millennial-focused Jet will be the sole home for Modcloth and Bonobos products for now; you'll never see them in Walmart stores or the company's own website.
This packaging makes sense; according to a report from Digital Commerce 360, the higher income demographics of Walmart's new sites match more closely with those of Jet.
Aside from opening up Walmart to a new swathe of customers, the new direction will also help it strategically target some of Amazon's weaknesses.
Above all else, Amazon is known for its utilitarian convenience and efficiency. While that reputation has been a boon in making it the go-to destination for everyday commodity items, it's somewhat complicated its efforts to push into more brand-dependent areas like fashion.
Amazon is seen in many of its customers' eyes as a place to make a quick order when you know exactly what you want, not a site to idly browse new clothes or seek out designer wares.
Amazon seems to understand this. Similar to Walmart, it's launched most of its most recent forays into in-house apparel labels under new names that give no indication of their behemoth parent.
Here, Walmart has a chance to build Jet.com into a hipper version of Amazon by assembling a range of upscale niche brands with built-in cachet that people don't tend to associate with Amazon.
Walmart's not the only traditional retailer thinking along these lines. Target, now a distant rival, has been making its own more modest push into the world of trendy e-commerce.
Earlier this summer, it poured money into mattress delivery startup Casper after deciding against a billion-dollar acquisition. It's also locked down deals to make its stores the exclusive brick-and-mortar home for online brands like shaving companies Harry's and Bevel and pet subscription service Barkbox.
This game-plan seems to be a bit more natural fit for Target, which has always made its name as a cheap-chic alternative to drabber big-box counterparts.
But in both cases, the moves show how the existential threat posed by Amazon is forcing mammoth old-school retailers to think outside the big box, so to speak, and form unlikely partnerships with the young upstarts in their industry.
Topics Amazon
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