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Walmart Makes a Play for U.S. Sports Fanatics

The Motley Fool – Walmart (NYSE:WMT) has lagged behind Amazon (NASDAQ:AMZN) when it comes to licensed sports apparel and being able to offer certain prestigious brands in that space. But that’s no longer the case, as the retail giant has partnered with Fanatics to launch a specialty store selling licensed sports apparel on Walmart.com. As part of the deal, Fanatics will be the exclusive provider of officially licensed sports merchandise on Walmart.com moving forward.

Fanatics operates NFLShop.com, NBAStore.com, and MLBShop.com. It makes its own merchandise and sells a number of brands that Walmart previously did not have access to. This includes Nike (NYSE:NKE), New Era, Mitchell & Ness, and others.

Nike has sold select merchandise on Amazon.com since 2017. It has worked with Walmart’s Jet.com since October.

This deal fills a major hole for Walmart while greatly increasing distribution for Fanatics. It takes merchandise that consumers want and makes it easier for them to get it. That’s more important in a challenging retail climate where chains like Dick’s Sporting Goods (NYSE:DKS) lose a top rival in Sports Authority (back in 2016) and don’t show significant growth despite the reduced competition.

“The Fanatics partnership with Walmart will certainly benefit both companies,” Ken Morris, principal at BRP, retail consulting firm. “For Walmart, it increases the traffic on and brand image of the Walmart.com marketplace. As Walmart adds more leading brands to the marketplace, more consumers will think of it as a first place to do product searches, which Amazon currently dominates.”

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Walmart raises the bar with mobile returns

FierceRetail – Walmart is attempting to speed up every aspect of the shopping process, including the time it takes for a customer to make a return. The big-box retailer announced that its latest technology, known as Mobile Express Returns, will make returning an item faster and easier.

The experience will be available at more than 4,700 locations for those using the Walmart app. The new process will be available starting in early November for items sold and shipped by Walmart.com. The company hopes to eventually roll out the process for items sold by its third-party sellers.

The refunded amount will be credited to the customer’s account within 24 hours. And starting potentially in December, customers will see an option in the app to instantly receive a refund before the item is even physically returned to a store.

David Naumann, vice president of marketing for Boston Retail Partners, notes that product returns and exchanges are an ongoing challenge for e-commerce retailers and consumers. And even as smooth as some have made the process, it still usually requires a trip to the post office or UPS to drop off the package. Therefore, Walmart’s move puts it in a prime position to leverage its stores—within 10 miles of 90% of the U.S. population—as return locations.

“They are also raising the bar on speed and convenience,” Naumann told FierceRetail. “Walmart’s return process has a reputation of being slow and frustrating. Mobile Express Returns, which allows some products to be refunded without physically returned, is a creative process for convenience.”

Naumann continued: “If the Mobile Express Returns app works as promised and is intuitive, Walmart will delight customers and help improve customer loyalty. It will also reduce frustration with sales associates and allow them to spend more time helping customers or other tasks that are more enjoyable than dealing with unhappy customers. This could lead to happy customers and happy employees. It will also raise the bar for the competition.”

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Walmart Pushes Ahead

Frozen and Refrigerated Buyer – Unwilling to cede its leadership position to Amazon or anyone else, the world’s largest retailer pursues an aggressive omni-channel strategy heavy on e-commerce. After watching retail institutions like Sears, Radio Shack and Payless fall victim to the e-commerce leader, something stirred in the Bentonville, Ark.-based chain.

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In fact, Walmart’s biggest advantage over Amazon its brick-and-mortar stores, located within 10 miles of 90% of the U.S. population. That means consumers who don’t want to wait two days for an item ordered online to ship can drive to a nearby store and pick it themselves the same day if it’s in stock. Or in a couple of days, if they want to save a few bucks if they want to save a few bucks on home delivery. And while they’re there, they might gas up the car or grab something for dinner as well, things they can’t do on Amazon.

Whether for ship-to-home or in-store pickup, “Walmart has a huge opportunity to use its stores as distribution centers as well as theaters for shopping,” says Ken Morris, principal at Boston-based Boston Retail Partners. Yes, Amazon is likely to do the same with Whole Foods, but Walmart’s got a huge head start.

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In addition, “For many consumers, using their phones for a multitude of tasks is second-nature, so it just makes sense to allow them to check out and pay through their phones as well,” says Morris. But Walmart’s Scan & Go app takes the technology several steps further, he continues, allowing shoppers to fill prescriptions, maintain shopping and wish lists and run Savings Catcher, a function that searches for better deals on each item for up to week after purchase and then credits any difference to the user’s account. “This is a great way to build brand loyalty,” he says. “If promoted properly, Savings Catcher can become a very big deal.

Yes, keeping fixed costs low helps ensure the low prices that shoppers love. But that’s no longer enough. “Shoppers have zero tolerance for a less-than-optimal in-store experience, especially when Amazon and other omni-channel retailers are only a click away,” notes Morris.

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Walmart courts the fashion world with Bonobos, Modcloth acquisitions

Luxury Daily – Mass market retailer Walmart’s recent acquisitions of online fashion sellers could put the retail giant on a course set more toward high-fashion than its typical fast-fashion apparel and accessories.

The company has recently gone on a shopping spree, picking up online fashion retailers such as men’s brand Bonobos and Modcloth, a seller of women’s apparel, accessories and homewares, which typically serve a shopper more discerning than Walmart’s regular retail hub. While the move may seem at odds with Walmart’s more down-to-earth products, its large built-in customer base could be a boon for the recently acquired properties.

“Success in selling luxury via e-commerce is largely about building and communicating unique brand imagery in a way that invokes emotion and resonates with the consumer,” said Laura Sossong, manager at BRP Consulting, Boston. “Walmart must be sensitive to the customer’s association between them and their high-end acquisitions, for fear of jeopardizing existing brand equity and exclusivity.”

As more brands offer options for international shipping and local currency purchasing, luxury consumers are beginning to expect a certain level of convenience to cross-border ecommerce. The luxury brands that encourage this expectation and rise to meet it will be most successful.

While Bonobos and Modcloth are not in the upper echelons of high fashion, they are significantly closer to that world than typical Walmart offerings. The luxury world should keep an eye on Walmart’s future as it could continue moving in that direction.

“Walmart is wisely following the cues of other retail powerhouses such as Amazon and Yoox and acquiring market share in the high fashion space,” BRP’s Ms. Sossong said.

“As they have an overwhelmingly large share of captive customers and have achieved utmost efficiency in pricing, inventory and supply chain models, they are now looking to expand and evolve by acquiring new segments and types of clientele,” she said.

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Amazon lowers free shipping threshold after Walmart’s sterling Q4 in ecommerce

Mobile Commerce Daily – Amazon has recently lowered its minimum order for free shipping to $35 — the same minimum Walmart instituted on free two-day shipping not three weeks ago, in a move that evinces Amazon’s acknowledgment of Walmart’s enterprising ecommerce tactics.

The slash comes one year after Amazon had raised its minimum shipping order to $49, no doubt to make its Prime service (which is competing with big-box retailers on one side, digital content outlets on another and grocery and convenience stores through Prime Pantry) more appetizing to consumers, who as a whole are tending to use Amazon more. It is almost certainly a reaction to Walmart’s own slash, after the company managed to speed sluggish growth in ecommerce in 2016.

The two retail giants have been all but squaring off in the past year, with Walmart’s unexpected ecommerce success in 2016 proving to severely gut into some of Amazon’s most profitable sectors. Despite overall growth in Q4 sales only growing one percent, Walmart’s fiscal report from the quarter is an important read to establish context for the growing competition: ecommerce growth at Walmart in the United States was strong as sales and GMV increased 29 percent and 36 percent, respectively, including Jet.com and online grocery.

And the similarity in the recent moves both companies have made in ecommerce show their willingness to compete. While Walmart is developing its online grocery infrastructure (and is even scaling mobile grocery ordering and delivery in China), Amazon is simultaneously scaling its AmazonFresh and Prime Pantry platforms to deliver essentials, offering a generous free shipping package to consumers in its early stages (see story).

A watershed moment for Walmart occurred when it purchased ecommerce player Jet.com for $3.3 billion last August, swallowing all of its ecommerce infrastructure and digital-savvy executives within it. One of the first high-profile moves new CEO of Walmart eCommerce U.S., Marc Lore — also founder and CEO of Jet.com — was to scrap Prime competitor product ShippingPass in favor of reducing the free shipping minimum purchase price to $35 from $50, and offer free shipping on an array of household products in a direct shot at Amazon (see story).

“Walmart has a lot of upside potential for online sales. Its online sales only represent about 3% of total sales, whereas the average retailers’ online sales are 8-10%,” said David Naumann, vice president of marketing at BRP. “Walmart realizes that they have a lot to do to catch up in the online space and they are making significant investments to bolster its online systems and product offerings.

“They spent about $900 million on digital in 2016 and the plan to invest another $1.1 billion in e-commerce this year. Most recently, they bought the outdoor gear seller Moosejaw for $51 million in an effort to expand its online product selections.”

Read Full Article: Amazon lowers free shipping threshold after Walmart’s sterling Q4 in ecommerce