Tag Archives: Bonobos

Walmart loads for bear

How do you extend your business to compete with always-on world of ecommerce? For one retail giant, the answer appears to be if you can’t beat ‘em, join ‘em. Or buy them, at least.

The latest rumors have Walmart in advanced talks to acquire Bonobos, the well-loved fashion brand that built its reputation on stylish men’s essentials. An industry pioneer, Bonobos has carved out a niche in the retail and fashion space, both through its catalog, eCommerce site and boutique stores.

Bonobos’ stores are a prime example of how brick and mortar retail is shifting. While you can purchase some products in-store, the space is really used to provide experiences for the customer, immersing shoppers in the brand’s curated world view and easing the anxiety that often comes with making sure the clothes you buy online actually fit. From the variety of items on display to the personalized service the staff provides in guiding customers through the buying process, the experience is what sets Bonobos stores apart. Coupled with traditional retail practices such as colorful, magazine style catalogs, a robust eCommerce site, and aggressive email marketing efforts, it’s the model of the modern retail experience. And it makes Bonobos an intriguing target for Walmart.

Walmart is well known for its always low prices, its robust supply chain, and its disciplined approach to supplier relations. So why would the world’s largest retailer want to change? Walmart has long attempted to build out its own eCommerce footprint. Despite those efforts, it’s still perceived as something of an also-ran against some of the internet-first retail giants in terms of products, services, and user experience. One could consider Walmart’s 2016 purchase of Jet.com as a sign the company finally recognized its shortcomings in that space. The Jet.com model is an interesting one, in part because it allows the consumer to adjust the price of products either by bundling higher quantities or varieties of products into one order, or opting into- or out of a variety of associated services. For instance, customers can determine shipping costs based on how quickly they want to receive a product, they can forego the option of free returns, and prices generally drop with each item added to a single order. Tied into the vast network Walmart already has with major players in consumer products, it may prove to a long-term winner for the Bentonville firm.

Adding other eCommerce players such as ModCloth, Moosejaw, ShoeBuy, and now potentially Bonobos, seems to signify Walmart recognizes its current business model needs to evolve in order to compete in today’s retail environment. But this strategy also has Walmart walking a fine line. For instance, Bonobos and ModCloth built their brands largely by being what big box retailers are not. Their value is not derived solely through products, but also the experience they’ve been able to create. As men become more attuned to their styles and grooming needs (just looks at the rise of men’s shaving services), or women look for authentic clothes for any body type, retailers will need to address and target these segments in a much more precise manner. There’s a reason consumers flock to these emerging brands – retail is no longer a one-size-fits-all industry.

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More stores coming to you a neighborhood…wait what?

The recent news that Warby Parker and Bonobos would be exploring opening a greater number of physical stores, coupled with Amazon themselves becoming more present in the physical space. Why? These are all eCommerce giants. Retailers who built their brands and businesses by bypassing all the costs and constraints that traditional retail was burdened with. In parallel we are seeing brick and mortar brands such as Sears and Gap, continue to readjust their store footprints. They are looking to shutter more of their stores, hopefully working to a profitable number and type of stores. So what gives?warby-parker-eyewear-logo

We are witnessing a balancing. Retail will most likely never be all online or all in person, but it will be a state of constant retail. We, as consumers, will be able to search for, experience, acquire and return products constantly, with fewer and fewer boundaries. There is no more omni channel or eCommerce, but really simply “commerce.” Whether it is social shopping like we see with Facebook or Salesforce, pop up stores, mobile commerce via trucks and vans, buy on line pick up in store, personal shoppers, subscription based shopping and the list of retail options continues to grow – how we shop, how we purchase and acquire “stuff” continues to evolve.

But what is the one underlying aspect we must always be aware of, that our brands have to be conscious of? Their inventory. At the core of this new shift in retail is the constant challenge – how do I make sure I have the right product at the right place and for the right margins? Being able to fulfill orders out of a dedicated distribution center for online sales, is challenging enough. As these retailers start growing their brick and mortar footprint, they will have to adjust their inventory strategy, fulfillment efforts and overall distribution tactics.

An overarching theme this recent news emphasizes is the continued shift in retail. Omni channel is really only a stage in the journey towards always on commerce: ambient commerce. A state of commerce when we are always able to transact and have fulfillment occur in multiple locations. Consumers will not distinguish between how they are accessing the brands, and expect experiences to be similar regardless of how they arrived at the decision making point. This shift in the retail landscape continues to emphasis the importance of have deeper view into the overall network and how inventory flows. Whether traditional or eCommerce retail giants, as consumers demand greater reduction in commerce friction, the network must support an inventory strategy that can keep up.

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Filed under Current Events, Retail