An $18,000 Cartier Watch for Wal-Mart's Black Friday Shoppers?
November 24 2016 - 7:29AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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