E-COMM

Walmart After Dark

In the blue light glow of last night’s TikTok event, you may have missed Walmart’s low-fi moves to build a profitable e-comm arm. 

Entering uncarted territory: Walmart is converting one of its Dallas area Supercenters into a dark store, the Dallas Morning News first reported. 

• Dark stores speed up online fulfillment by shortening the distance between products and consumers—a necessity in Walmart’s biggest market (Dallas-Fort Worth).  
• Once the new center opens, employees who previously held store roles will have the option to be retrained for fulfillment work.

This isn’t a total floorplan flip: Walmart said in January it would rethink its store experiences to pack more online orders. Retailers including Best Buy, Macy’s, Whole Foods, and a younger Walmart have turned the lights off on shoppers with the same goal before. 

• Other retailers (Apple, Nordstrom, the list goes on) are scratching a similar itch with online fulfillment from operational stores.

Hitting ghost mode: Walmart Canada is testing a ghost kitchen concept at a store outside Toronto, with four more arriving on the menu up north this year. Shoppers can choose two adventures: 1) prepped meals or convenience items, and 2) delivery or in-store pickup. 

Undercover operation

Walmart’s latest e-comm experiments complement a larger initiative to amplify its online presence, Business Insider reports. 

In a confidential plan (codename: Project Glass), Walmart said its current ops “fail” shoppers. So it wants to convert Amazon boxes to Walmart boxes by...

• Speeding up fulfillment times, including a push for one-hour delivery. 
• Folding grocery and everything-else fulfillment into a single in-app experience. 

Even with new investments, Walmart’s still an oversized underdog. For example, check out its delivery real estate: Research firm R5 Capital estimates Amazon operates 15x more fulfillment centers than Walmart—and Amazon's closing in on 1,500+ delivery centers. 

Bottom line: To catch up with its biggest competitor, Walmart’s throwing everything into the cart and seeing what fits. 

DISTRIBUTION

A Wholesale Rejection

For Adidas, Impossible is Nothing—particularly when it comes to selling directly to consumers. Adidas unveiled plans this week to zero in on its DTC business, increase revenue by a third, and double online sales by 2025. 

Plugging in: E-comm will help drive Adidas’s new strategy, and so will expanding its physical footprint and product offerings. By 2025, Adidas wants to...

• Invest roughly $1.2 billion into digital operations. 
• Reduce its wholesale partnerships and elevate DTC to 50% of sales, compared to 30% in 2019 and 40% in 2020. 

Three’s a crowd: Adidas is taking a walk in Nike and Under Armour’s shoes by rejecting wholesale. 

• Nike severed ties with nine retail partners as part of its online-driven restructuring plan.
• Under Armour plans to exit between 2,000 and 3,000 wholesale partnerships over the next few years. 

The takeaway: Major sports apparel brands have realized wholesale partnerships don’t maximize profits. And other segments are catching on too: Luxury retailers like Prada have pulled the wholesale escape hatch in favor of new distribution models. 

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APPAREL

Keeping it Casual

The transition from workwear to casualwear has been happening for exactly one year, but some brands are still buttoning up their approach.  

Hugo, not Boss: Hugo’s deemphasizing the Boss, embracing the casual over the formal after pandemic trends drove a 33% YoY sales decline. 

• In a collaboration with the NBA, Hugo Boss released the first of two casualwear collections that sport the logos of nine NBA teams. 
• The company also inked a deal with Russell Athletics for a co-branded apparel line combining formal and athletic wear. 

Slimmer fit: Express debuted two smaller format stores dubbed “Express Edit.” It’s part of an experiment to become less dependent on malls. 

• Casualwear was its saving grace in 2020. The company estimates its “Express Essentials” line will produce $125 million in sales this year. 
• Q4 net sales fell 29% YoY to $430 million, and comparable in-store and online sales dipped 28%. 

Zoom out: With WFH a reality for the foreseeable future, Covid casual is likely here to stay. Gap, Abercrombie & Fitch, and Nordstrom are just a few other names that have swapped suits for sweatpants.  

WHAT ELSE IS BREWING

• Nike is the latest retailer tying executive pay to reaching inclusivity goals.
• Ulta CEO Mary Dillon will step down in June. 
• Lord & Taylor will relaunch as an e-comm-only retailer. 
• CVS is expanding its Covid-19 vaccination program.
• Build-A-Bear was hard-hit by Q4 store closures in the US and Europe. 

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SWAPPING SKUS

What goes around comes around, including longreads topics. Today, we’re taking another spin through the revolving door of resale. 

• In-season Gap apparel isn’t exactly flying off shelves. But dated logo hoodies are reselling for a premium on Grailed and Depop. (Input)
• When luxury brands have deigned to enter resale, they’ve partnered with upscale secondhand marketplaces. They may want to consider opening in-house platforms instead. (Jing Daily)

FRIEND OR FAUX?

Some retail headlines can be pretty absurd, but luckily, so are our imaginations. Can you spot the fake story below? 

1. Blockbuster is getting a potential blockbuster. Netflix is releasing a documentary on the chain’s last standing store. 
2. Apple plans to release augmented reality contact lenses between 2030 and 2040. 
3. You’ve heard of tiny homes, but Home Depot is now selling tiny offices for your WFH life. 
4. KFC Canada launched KFC Couchside Kicks: slippers you can wear when watching basketball at home.

Keep reading for the answer. 

ICYMI

Catch up on the Retail Brew stories you may have missed.

• Ahold Delhaize Will Double Its E-Comm Investments This Year
• Jared Bets on Jewelry Customization with New Store-in-Store
• How Eight DTC Brands Are Preparing to Scale Their Teams

FRIEND OR FAUX? ANSWER

Home Depot isn’t selling tiny offices, but those are a thing.