Wal-Mart's Apparel Business: A Makeover that Falls Short

Strategic Insights -

Wal-Mart, the world's largest retailer, has given its apparel departments a makeover in the past 12 months, introducing more private-label fashion merchandise than ever before. However, the question remains: has anyone told consumers about this change? Despite improving its merchandise compared to competitors like Target and Kohl's, Wal-Mart has failed to effectively market its new offerings, leaving its apparel business struggling to grow. According to Marshal Cohen, chief industry analyst at The NPD Group, the lack of marketing and brand essence has turned Wal-Mart's apparel into a basic commodity business, making it hard to attract young career professionals and cross-channel shoppers.

Key Takeaways:

  • Wal-Mart has introduced more private-label fashion merchandise than ever before in the past 12 months, but has failed to effectively market it to consumers.
  • The retailer's apparel offering has improved dramatically in 2004, with merchandise comparable to competitors like Target and Kohl's.
  • Wal-Mart's sourcing and distribution capabilities position it to lead with well-designed apparel at rock-bottom prices.
  • However, the lack of marketing and brand essence has turned Wal-Mart's apparel into a basic commodity business.
  • George, Wal-Mart's new private-label line, has failed to gain traction, despite its impressive assortment.
  • The brand's personality and identity are unclear, making it hard for consumers to connect with it.
  • Kmart's high-profile back-to-school advertising campaign for its private-label apparel has driven customers into its stores, highlighting the importance of effective marketing.
  • Wal-Mart's private-label cashmere sweaters have been a success, providing known value at remarkable prices.

Statistics:

  • Wal-Mart has 25% to 28% of the basic commodity business in apparel.
  • The George women's metro pant is currently on sale for $8.79, down from $17.57.
  • The George misses leather blazer is on clearance at almost $20 less than its original price.
  • The men's and women's 100% cashmere sweaters are priced around $30 per SKU.

Sources:

  • "Without imagery, apparel just becomes a basic commodity business" - Marshal Cohen, chief industry analyst at The NPD Group.
  • "Kmart is outmarketing Wal-Mart. The brands they have marketed have had a reason to be: an identity, a personality. What's the personality of George?" - Marshal Cohen, chief industry analyst at The NPD Group.
  • The NPD Group (no date) - a research firm that specializes in the retail industry.