When Wal-Mart (WMT) tried to makeover a number of its stores to attract higher income shoppers, the effort was a failure. Consumers simply could not see the world’s largest retailer at an environment where they wanted to go to buy trendy clothes.
So, Wal-Mart will take the effort online where well-heeled consumers do not have to see its stores or their locations. "Called z.b.d. design, the new clothing line is being tested by the world’s largest retailer only on its Web site," according to Reuters. The new service adds that "Wal-Mart is trying to get its apparel sales back on track after efforts last year to compete with Target Corp and sell hipper clothes, like skinny jeans and velvet blazers, backfired with its shoppers, who were looking for basic, classic and affordable clothing."
Walmart.com is become a bright spot for the company which is otherwise struggling at it US retail unit. If the clothing sales effort is a success it will add to two other notable online "wins" for the company.
Earlier this year, Wal-Mart began a program where customers could order merchandise online and pick it up at their local stores. Buyers avoided paying the shipping charges. But, WMT also found that, when these shoppers came to retrieve their orders, they were likely to buy other merchandise during their visit.
As DVD and CD sales have dropped due to online digital delivery services from companies including Apple (AAPL) and Amazon (AMZN), Walmart.com has set up its own download services. The company has a huge advantage in this business because of traffic to its websites. According to comScore, Wal-Mart has the 21st most visited site in the US with 29.2 million unique visitors in July.
Perhaps WMT can close some of its under-performing stores and try to migrate more purchases online where margins are almost certainly better.
Douglas A. McIntyre