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Walmart might have to acquire more brands to win over millennials



Acquisitions are a crucial
part of Walmart’s long game.

Platt / Getty Images

  • Walmart is focusing on
    acquiring more specialty brands like Bonobos and Modcloth.
  • According to analysis from financial
    services firm Cowen and Company, these acquisitions will help
    the company attract millennial customers. 
  • Walmart’s e-commerce president and CEO Marc Lore has
    said the specialty
    acquisitions would also help the company “create a reason for
    customers to shop” at Walmart over their competitors in the
  • Still, Lore estimated that Walmart will need to acquire at
    least 40 more brands going forward.

Walmart is on a mission to win
over millennials and brand-conscious shoppers.

Its secret weapon is acquiring specialty brands like Bonobos and

But, according to a recent report from financial services
firm Cowen and Company, the battle of the brands isn’t over yet.

Cowen’s analysis was based on a meeting with Walmart’s e-commerce
president and CEO Marc Lore. The report said that while the
company “has acquired a handful of successful digitally native
retailers,” it’s Lore’s view that Walmart “will need to acquire
at least 40-50 brands that resonate with millennials to help lift
the margins in the long-tail.”

Lore’s comments to Cowen mirror his statements at an October 16
meeting with investors. At the
meeting, Lore said that in the future, major retailers will
largely sell similar products, so differentiation will be the key
to success.

“How do you actually create a reason for customers to shop on
your website versus your competition?” Lore said at the meeting
with investors. “And I think this is one way. This is one big
way, having proprietary content. It’s not going to be just four
brands aren’t going to do it, but imagine 40. So the idea is over
a long period of time to continue to incubate and buy and build.
So we have a portfolio of brands and unique content.”

A Walmart spokesperson also told Business Insider on Monday that
“one of the drivers for customers to continue coming back to your
brand is going to be finding products and experiences that they
just can’t get anywhere else.”

But the retail giant is already well on its way, having acquired
apparel brands Bonobos, Modcloth, Moosejaw, and Eloquii. Other major acquisitions
include e-commerce company, media technology company Vudu, and delivery startup Parcel.

Cowen’s report said that “a combination of partnerships,
acquisitions, and investments in category specialists” will help
Walmart combat Amazon. And, according to the report, Lore said
that Walmart’s specialty acquisitions have improved product
assortment and content overall.

According to Cowen, Walmart has avoided harming its acquisitions’
brand recognition by maintaining the direct-to-consumer channels
of its digitally native brands — meaning shoppers still go to
Modcloth or Bonobos to shop, rather than Walmart’s site.

Lore told Cowen that while news of several brand acquisitions
generated a few weeks of negative press, brands like Bonobos are
still performing well and gaining customers.

The Cowen report said that the brand’s ongoing mergers and
acquisitions will prioritize “specialty retailers and digitally
native brands” that will allow Walmart to “gain sustained

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