It is targeted directly at competing more effectively with Amazon. I don’t believe either company is worried about dilution of their respective brands.
What Walmart needs is to keep leveraging its existing strengths — logistics and supply chain, as well as immense amounts of capital — while invigorating its online retail division so that over the next 20 years, they can appeal and sell to their target demographics (which is what millenials will become) with the same stickiness that Amazon does.
Bonobos is popular among young male professionals that are relatively fashion-conscious. There are many workplaces in New York where the majority of new grads and millenials buy most of their wardrobe from Bonobos. The key — Bonobos is often the first place they look at. Andy Dunn has demonstrated he knows how to build a business that’s both sticky and appealing.
He’s joining an online retail division headed by Marc Lore, and a Walmart that is shifting gears to face the Amazon behemoth.
Purchasing Bonobos is part of their strategy of capturing audiences and market-share in the short-term, and of building a portfolio of brands that they can continue to expand for the long-term.
Bonobos (as well as other recent acquisitions), and Jet.com, which Walmart acquired August 2016, are brands that were born online and grew online. These acquisitions mean people like Marc Lore and Andy Dunn, well-versed in the art of courting a customer base through primarily-online channels, are now at Walmart. And I foresee this trend continuing as Walmart’s ship slowly but steadily steers towards the age of online retail.
Yes, as someone who almost exclusively wears Bonobos and is a relatively young professional I'm super worried about this. I've been to Walmart probably not more often than the times. I can only assume and hope that Walmart did this to get access to people like me and not to transform Bonobos to cater to people who wear three wolf shirts.
> “Assortment is driving a lot of these acquisitions,” Wal-Mart Chief Executive Doug McMillon told investors last month before the ModCloth acquisition became public. “There are some suppliers that don’t want to sell on Wal-Mart.”
To me, that sounds like a plan to make Bonobos (or Moosejaw) a Wal-Mart company rather than to apply Wal-Mart's expertise to the acquired company.
You're saying in 20 years, the 50+ year old demographic will become relevant to mainstream retailers. What do you base this projected transformation upon?
Other reports have said Walmart is seeking to move upmarket, because lower end consumers have no money to spend, with expenses like food and rent dominating their budgets...I think this is the motivation for this acquisition.
Check out the "malefashionadvice" subreddit about this deal. There is a huge, "I'm burning my Bonobos" backlash. Fashion is as much about image as anything, and I think it will be very difficult for Bonobos to make this transition into Walmart smoothly.
It's not just MFA/fashion, the same cycle repeats anytime a big corporation consumes a smaller brand... like my Amazon coworkers bemoaning "the end of Whole Foods" earlier today.
Personally, I'm still happy with my Bonobos products but I'll use this as motivation to start supporting another retailer.
Also, Walmart is trying to get more into online business and Amazon is getting into brick and mortar stores to marginalize walmart and target even more. Interesting.
Bonobos started out selling decent-looking business-casual type pants for "normal-sized" guys, i.e. those of us who would not fit in the skinny pants that were becoming the rage.
They had show- and fitting-rooms, but you had to then order the stuff (could be done in the showroom) and wait for delivery... in the US only. They said they were barred from shipping to the EU because someone else had the trademark there.
Not sure what became of their quality but I bought two pair about five years ago, loved one and the other was meh... and then they discontinued the style of the one I liked before I could order another pair. :-(
Walmart was definitely not the image they were going for originally, IIRC the founders were Stanford kids.
>"Walmart was definitely not the image they were going for originally, ..."
This was my thought too, you could go into the brick and mortar Bonobos store(Guideshops) and get a fitting, a consultation and they would offer you local craft beer. This seems like the antithesis of "one stop shopping."
I think you have their original style promise a bit off -- They were effectively marketing as "not your father's Dockers". Their cuts were well on the slim side -- maybe not Armani slim, but they fit a whole lot slimmer than generic non-designer department store khakis.
According to the Time article, these guys are paying college-educated sales staff ("ninjas") to constantly phone and tweet with their customers, in order to sell pants that are basically Dockers with slightly different tailoring for $195 per pair.
Who can read that article and tell me we're not in a bubble? The whole piece reads like a parody from Silicon Valley.
Bonobos is super expensive. I don't know how folks can afford to shop there. It would kill me to spend $300 on 3 dress shirts when I can get the Kirkland Brand for a fraction of the price. Even their sweat shorts are $80 and the Nikes I have were $15 on sale. The cheapest you can get a pair of jeans for is $100, Eddie Bauer has really nice jeans for half of that when they are on sale.
I get the feeling Walmart is desperate to compete and will buy anything these days when all they really need to do is build a Web site that is easily navigable and works. You think a company with their resources could afford the talent required to build a site like AMZN has.
Yeah, $100 a shirt is fairly competitive with other fashionable brands.
I end up buying more expensive shirts just because I don't feel as bad about having to have them altered. My arms are really long and my neck/shoulders are really broad relative to my height, so even slim or "extreme slim" dress shirts have a tendency to billow out of my pants unless I have them taken in, and I always have to have the arms slimmed significantly as well. When you spend that kind of money to have the clothing altered, you might as well spend a little extra to alter nicer clothing.
CT definitely offers some of the best deals. Kamakura offers extremely high quality shirts for $89, though. Bonobos is just not high enough quality to support the hundo price point.
> I get the feeling Walmart is desperate to compete and will buy anything these days when all they really need to do is build a Web site that is easily navigable and works. You think a company with their resources could afford the talent required to build a site like AMZN has.
They have Walmart Labs [1], which to your point, doesn't seem to have the ability for whatever reason (don't discount the talent, its entirely possible that the bureaucracy in Bentonville, AR is holding them back).
How many designers and engineers who have the choice between Apple, Google, Facebook, Airbnb, Uber, Lyft....or literally any other company...would choose Walmart? The company known for using the United States welfare program as supplemental income for their hordes of low-wage employees?
Their brand image is a big turn-off for the upper-middle class yuppies who make up the majority of tech talent. They would be smart to lean much heavier on the jet.com brand in the future when it comes to recruiting.
They (Walmart Labs) do pay pretty decently. In all honesty, the solution may just be a total rebranding of Walmart's online platform and development team. If it were called "Bazaar" or something equally sexy, they could probably attract not only more talent, but more shoppers in the millenial demographic.
If their upper management has any smarts, they have to know all the connotations and baggage that go along with the name Walmart. I don't think it's a brand they can hang on to forever.
I get the sense Walmart's internal heirarchy has the same problem as GM's.
I.e. that they've both been around long enough that their management is staffed with people who owe their live to the company, and therefore have a very different perspective on it than anyone outside the company.
Feed enough corporate rah rah and keep knowledge workers from seeing any of their low level employees, and I imagine it would start to look pretty good.
Walmart and WalmartLabs are two different entites. One is headquartered in Bentonville (AR) and the other is headquartered in San Bruno (CA). The Labs is the technology entity that is funded very generously by Walmart. I work for Walmart and I find the environment very fast paced, colleagues are very skilled and the pay is at par with Google and Amazon.
My current and previous jobs were with well funded non-IT companies that have an IT arm with their own executive structure. Unfortunately, the company is still shackled by shareholders who have their own ideas and do not understand on one hand, you have a massive company with huge profits. On the other hand you have another area, more nimble that is trying to innovate. Things eventually bleed (or, are bleeding over).
I wish you the best of luck. Not just for your job, but for Walmart. The world needs competition.
> How many designers and engineers who have the choice between Apple, Google, Facebook, Airbnb, Uber, Lyft....or literally any other company...would choose Walmart?
Well, Walmart is quite well resourced, has a lot of talented folks, the facilities (for engineers) are enticing, they offer the opportunity to work on stuff with huge scale, and the pay is relatively comparable.
> quite well resourced, has a lot of talented folks, the facilities (for engineers) are enticing, they offer the opportunity to work on stuff with huge scale, and the pay is relatively comparable.
Apple, Google, Facebook, Airbnb, Uber, Lyft, etc. etc. offer all of these things as well.
The only way for Walmart to win the talent game would be by offering absurdly above-market pay packages or absurdly above-average work-life balance policies. Which I'm quite certain, given their corporate culture based around beating down costs and maximizing efficiency, will not sit well with the lifer-execs back at home base.
> The only way for Walmart to win the talent game would be by offering absurdly above-market pay packages or absurdly above-average work-life balance policies.
Fun fact: If you account t for cost of living, Wal-Mart does pay more than many others.
There's also many other perks from working at home base. Massive fitness center (Who else can can claim they have 3 pools), cheap Sam's Club memberships. Add in that you get to try all the cool things like most others do (Savings Catcher, Scan n' Go, Grocery Pickup) and you get a substantial boost to the value.
This reputation is meritless these days. I work remotely from a desirable town, with, ahem, very competitive pay, 4 weeks vacation, generous RSUs, etc. It's the outdated reputation rather than the actual facts that inhibits hiring IME.
BTW, we're hiring a mobile release engineer for our small Portland office if you're interested.
If you believe that the only "talent that has any merit" comes out of Stanford, you're right.
Good luck getting a talented engineer without either an Ivy League pedigree or a history of employment at AppAmaGooBookSoft hired at any of the trendy startups you've listed.
SV is a bubble, and there are good people outside of it.
I no doubt agree with you about the SV bubble (and credentialism is bullshit). But outside SV there are still tons of great companies offering the same thing that aren't walmart
This is only a problem in a relatively narrow corridor of the country. Almost everywhere else, Walmart is a staple.
Walmart is a different experience in the places where there isn't social stigma attached to it because normal people don't have any problem going there, but also because there isn't a political apparatus working to deny their attempts to improve their buildings, expand to newer areas, etc.
Not for nothing, but wasn't Walmart one of the first companies to use Node effectively at scale to ship hundreds of changes on the busiest shopping day of the year (Black Friday)?
Probably some interesting engineering challenges to pursue there. Pretty sure there is also a significant chunk of engineers that aren't as concerned about their approach to low-wage management. Amazon seems to have survived that challenge just fine.
I am not sure if I would count using Node as evidence for technical finesse. Personally I would rather work for a company accomplishing the same with say Scala, Haskell, or even C#, C++ or Java, before I would consider Node.
As an aside, we often talk about the coming "labor apocalypse" with automation and AI, and yet, Walmart is the single largest killer of jobs across the country, hands down. Think of how many small retailers, groceries, electronics and nurseries and garden centers have had to close their doors. Also how many jobs has Walmart squeezed out of other companies because of their race to the bottom with pricing?
> They would be smart to lean much heavier on the jet.com brand in the future when it comes to recruiting.
They are doing just that. Have had a couple of contacts from them, and always as jet.com (with a throwaway line in the second paragraph about their exciting recent acquisition by Walmart).
I actually knew some very smart and talented people working for WalMart labs. Not sure if they are still there though. I suspect upper management would be pain (hell) to deal with.
> Their brand image is a big turn-off for the upper-middle class yuppies who make up the majority of tech talent.
I like to think that too, but a lot of it is all talk. I used to work with this dude in Boulder who was really into virtue signaling. Did all the right Boulder things, shopped at the right Boulder places, drove the Boulder car that showed you "cared", but just couldn't give up that cheap Walmart cell phone coverage. His attitude was "well it's a dirty secret no one has to know", which coincidentally(?) sums up Boulder fairly tidily.
Yes, the best kept one being that it's overblown with NIMBYism. It's residents like to think it's on par with places like Seattle in terms of social progress, but it's all talk and no one seems willing to write the checks. It's very pretty though!
It's funny because Seattle has and has been having a serious problem with NIMBYism for a while now. We're headed towards being the next SF and nobody's willing to give up their sweet single family housing designation to save the place. Same issue for our abysmal mass transit - a hyper-wealthy island community between Seattle and Bellevue is raising taxes to fund a law suit against WSDOT to stop light rail from going through their area because it would cost them dedicated single occupancy use of the HOV lanes. Can't make this shit up.
There are some people who just won't buy an average brand, won't wear shirts that cost less than $100, or shoes that cost less than $300 because they relate price with quality. And they have the ability.
For the niche, bonobos is not super expensive. You are obviously not the target market. A lot of the time, clothes really do make the man.
If you don't see the value in clothes I don't see why you're making value judgements. A similar analogy would be "Chipotles is super expensive, you can get the same thing for much cheaper at Applebees with a coupon", missing the point that Chipotle is competing with restaurants that are far more expensive.
>
A similar analogy would be "Chipotles is super expensive, you can get the same thing for much cheaper at Applebees with a coupon", missing the point that Chipotle is competing with restaurants that are far more expensive.
Tangential to your point, but you seem to have reversed “Chipotle” and “Applebees” here.
I feel like walmart through no fault of their own has a bad brand in certain groups and would be well served by creating some sort of alternate brand to umbrella its acquisitions. Some people look down on those who shop there and in order to target those negative often times web savvy people they should create a child brand.
Walmart is plenty at fault for their brand's image. Until very recently, they've been on a trend of pushing workers harder, driving suppliers to produce shoddier and shoddier products, lying about potential jobs to get small towns to subsidize building stores that run local companies out of business, then moving those stores to new locations and refusing to let competition lease the empty building they left behind, intentionally screwing around with employee schedules to make it hard for them to keep the second job that they need, making life miserable for long-time workers so they can avoid paying more than entry-level wages... the list can go on. Walmart has no one but itself to blame for its image.
While I agree with you in regard to wages and their employees treatment, I was referring to the way monied people view the store and those that shop there.
I heard of Bonobos quite a while back but never handled a pair of their chinos until about a year ago while shopping at Nordstrom. They certainly hit a price point for people that would get sticker shock from some brand like Adriano Goldschmied, but the quality of the pants is a bit out of line even for $90... so I guess there is a bit of irony in Walmart buying them :)
That's too bad. I've heard a lot about them, but never tried on a pair. However, I do have a pair of AG chinos that I bought on sale and they fit like heaven.
AG jeans are the brand I wore for a long time. They fit great and flatter me right out of the box, no tailoring required.
But the material is a bit thinner and doesn't hold up as well as raw denim. However, raw denim is a bit more of an investment. It takes 2 weeks of constant wear for raw denim to feel "right", and you're supposed to buy undersized and let them stretch to your body. Once you do that, they're really nice. However, before that happens, it's like wearing a lower body straitjacket.
Yeah I felt them at Nordstroms and thought the Nordstrom in house brand was much better quality. Then again Bonobos is probably more fashion forward wrt the cut and style.
That multiple doesn't seem crazy for a relatively early stage ecommerce startup. But, I'm guessing the acquisition price was based more on Bonobos' private valuation. Bonobos has raised ~$125 million so a $310 million valuation would be reasonable.
Looks like an acquihire. Andy seems to be getting a pretty decent position within the upper management of the ecommerce division at Walmart.
This is all speculation: Perhaps it's part of some sort of internal coup within Bonobos, where Andy wasn't happy with some internal board/finance shenanigans. By taking a lesser valuation but moving into a big position within Walmart (likely with huge bonuses), he could end up getting reimbursed at a level disproportionate to his equity at Bonobos.
Walmart Labs, their e-commerce division has been on an acquisition frenzy for a while now. I recently interviewed there for a role that was directly involved with the M&A activities regarding technology and infosec.
WHY? I've bought most of my clothing from Bonobos for the last few years, I guess I'll look elsewhere now.
> Partnering with Walmart — the biggest bricks-and-mortar retailer around — might have seemed extremely off brand for Bonobos.
YES it is. And "I think Walmart is misunderstood in some ways." isn't an explanation. Bonobos and Walmart are totally different in my mind, I can't imagine I'm the only Bonobos customer disappointed by this change.
Is it though? I've found Bonobos to be of mediocre quality and boring design which doesn't call for the price point they are at. For $125 you can start getting some really nice shirts from other brands (Saturdays NYC, La Paz, etc).
I think they probably can lean on Walmart to lower their production costs and possibly cut their prices to offer Walmart customers an option that is above their typical retail choices.
Shit, for $120 you can get a near perfect fit tailored shirt shipped from HK (if you're ok with massively high latency and waiting for someone to come by and take a dozen measurements).
For $20 bucks you can get an nice dress shirt from Costco.
Does anyone really think anyone else gives a shit how much someone spent on a shirt? or what their pants cost. Zuck shows up in sweat pants and t-shirt to work. He probably has never spent $100 on a dress shirt in his life.
"It's Brunello Cucinelli. I know this because I worked in the store he shopped in. They are $400 t-shirts and those sweatshirts are Brunello as well and are around $3,000."
"Mark Zuckerberg wears custom made Brunello Cucinelli tees in marl grey. I believe they run long for him, thus needing a hem. He chooses to order in bulk for an estimated cost per unit that varies from $300-$400. Price reflects on an order of plain custom tees vs. one of grey tees that feature the original 3 emblem Facebook insignia on the upper left chest."
I wouldn't use him as an example because he dresses the same way every day to project an image.
But I agree. You can find clothes that fit well for very cheap. If you're associating with people that care how much you spent on your clothes, you should maybe consider associating with other people.
some body styles can buy cheap clothes that fit well.
If you're even moderately muscular and don't want to look like you're wearing a tent, it's very difficult to buy clothes that fit well. For example, my waist is a 35-36 but I mostly have to buy 38 or 40 in waist jeans to fit my butt because of squats and deads. I mostly buy from Tommy Bahama for that reason.
For the most part no, no one cares how much another person spent on a shirt. Although I find dressing well and looking good is worth the effort for me. Some of my favorite shirts I bought vintage for $20 or less, while others I spent over $200 for (although those items are rare purchases for me).
The price doesn't matter as much as the styling, not even close.
I doubt anyone cares how much they cost. Some will care how they look. When you get all your clothes from Costco, you probably look like someone who dresses at Costco. Whether that matters at all is up to the individual.
Because the time cost for finding just the right style and the right fit and the right brand that combines both those two things for you that are in the right size costs about the same as just paying full retail, depending on how much you enjoy the shopping process.
I tend to know exactly what I want, and don't have the inclination to scour the discount racks in case they have exactly what I want. And if it's not exactly what I want, I usually end up not wearing it,, which is an even bigger waste.
Afaik, they're talked about a lot in terms of their actual-slim and really-slim (aka tailored) stuff vs the poorly cut or unavailable true-slim at other retailers.
I just stumbled onto their athletic fit and it's the best fitting pant I have ever owned. It's worth spending the extra money to have a pair that fit well.
You're right. I only buy during sales, and mostly I buy because I hate shopping and the clothes fit me (I have long limbs). The quality of their pants is not great, they do get worn out quickly.
I find Gant to be of much higher quality, especially the cuts that are made in India (I'm actually wearing one right now). For the price I don't think Bonobos even comes close.
> But for now, there are no plans to offer Bonobos’s $98 chinos or $128 dress shirts in Walmart’s 5,000-plus stores. Instead, Walmart is hoping to learn from Bonobos. Its co-founder and chief executive, Andy Dunn, will oversee Walmart’s digital brands, which also include the independent women’s brand ModCloth.
I don't think that pricing is very good. $100 for pants is not enough for "better" quality/craftsmanship like designer labels have, but it's not low enough to be an easy purchase.
Honestly, the $100 pants (from a few brands) I've worn don't feel any better (or last much longer) than $40-50 Uniqlo pants. I've always been curious about this market niche (better than fast fashion, but not designer quality).
For many clothing brands the sticker price isn't what many people pay. Sales occur every few weeks knocking 20 to 40 percent off of items. I think their shorts and pants are exceptional and worth the $50 to $70 you can get them for during sales.
> Sales occur every few weeks knocking 20 to 40 percent off of items. I think their shorts and pants are exceptional and worth the $50 to $70 you can get them for during sales.
Is selling most of your stock during sales profitable? If so, interesting business practice and I'm curious if it's more common than I thought (J. Crew could be doing the same).
Yes, because even during sales the margins are still high. They're just less high.
In fact, as JC Penney proved to consumers, you often make more money setting prices at $50 and having frequent sales at $30 than you do setting the price at $30 but having no sales.
Well somebody thinks that pricing is good enough because Bonobos just got bought.
This comment is more to point out to the OP that while Walmart might have bought Bonobos, it doesn't mean he's gonna go shopping at the actual Walmart building.
If i recall lore and/or Mcmillon said they are going to become experts in the product and online merchandising in Wal-Mart's various departments. Like apparel, sporting goods, housewares & domestics, pets, jewelry, auto, craft & celebration, gaming. To be the best at knowing at the product level.
The only way that has a chance of working is if they never let this brand touch one of their stores or their logo. Otherwise the association will wash away any kind of cachet the brand originally had.
For those who have never heard of bonobos, their pants fit exceptionally well. Andy & co focused on doing one thing, having quality pants that fit really well. The fit of the clothing matters more than anything about bonobos and it is where most brands screw up.
Do you mean they fit you really well, or that they go out of their way to provide a big variety of styles, cuts, and sizes so that they potentially fit anyone really well?
No, is not about a large variety of cuts and styles. They became well known because their pants, while generally on the slim side, don't make you look like a hipster in skinny jeans, but they also don't look like parachute pants. In the US, mass market men's pants tend to be really baggy and unflattering (aka "diaper butt") for anyone with a slim or athletic build, and that was the niche Bonobos filled.
In short, their pants just make your butt look good.
I wouldn't be so sure of that. In our tech circle, Amazon is indeed the darling and we love to hate on Walmart. However the latter is definitely skilled at logistics and supply chain optimization. Walmart is skilled in cut-throat margin markets, with the power to shift the upstream supply in order to meet its own goals. They are also better positioned to serve a wider demographic than just the upper middle class.
I like Walmart and I think they're in a very strong position to compete with Amazon. Hopefully acquisitions like this one indicate that they recognize the "disruptive" nature of ecommerce on their traditional business, which necessitates a separation so that the bigger business unit does not accidentally crush the smaller business unit.
WMT is written off way too easily on these forums.
It makes more in profits per year than AMZN probably has it's entire history.
And I certainly think it's gonna be a lot harder for AMZN to replicate WMT's network of retail stores (which double up as warehouses) than it would be for WMT to replicate any of AMZN's online efforts.
In addition, by being a "retailer" WMT also avoids getting into competitive fights with the likes of Apple, Google and Microsoft, all major platform owners, and can instead better partner with them.
The project won't cease to see improvement in the open source version. Hell, we have a large team dedicated to open source for stuff exactly like this.
This is going to be a disaster. They are anti-Walmart. Walmart needs to stay true to its vision of low price, high quality. Bonobos is high price, high end. "But for now, there are no plans to offer Bonobos’s $98 chinos or $128 dress shirts in Walmart’s 5,000-plus stores. Instead, Walmart is hoping to learn from Bonobos." Anytime you spend $310 million "hoping to learn"...you have no idea what your plan is and that means you fail when you're in e-commerce and aren't focused.
It's very hard to make m&a work at high valuations. Very few companies have done m&a well -- maybe just facebook & google & apple to a lesser extent.
It's very hard to make e-commerce work. E-commerce is checkered with failure.
Not sure why they'd acquire a hybrid high-end retailer along with a bunch of other strange e-commerce firms. They seem to be focused on apparel -- may be some plan for apparel?!
Also what I see interesting with Walmart is that they are pushing towards blockchain. If they actually continue in this path. It would beat the shiz out of Amazon.
It is targeted directly at competing more effectively with Amazon. I don’t believe either company is worried about dilution of their respective brands.
What Walmart needs is to keep leveraging its existing strengths — logistics and supply chain, as well as immense amounts of capital — while invigorating its online retail division so that over the next 20 years, they can appeal and sell to their target demographics (which is what millenials will become) with the same stickiness that Amazon does.
Bonobos is popular among young male professionals that are relatively fashion-conscious. There are many workplaces in New York where the majority of new grads and millenials buy most of their wardrobe from Bonobos. The key — Bonobos is often the first place they look at. Andy Dunn has demonstrated he knows how to build a business that’s both sticky and appealing.
He’s joining an online retail division headed by Marc Lore, and a Walmart that is shifting gears to face the Amazon behemoth.
Purchasing Bonobos is part of their strategy of capturing audiences and market-share in the short-term, and of building a portfolio of brands that they can continue to expand for the long-term.
Bonobos (as well as other recent acquisitions), and Jet.com, which Walmart acquired August 2016, are brands that were born online and grew online. These acquisitions mean people like Marc Lore and Andy Dunn, well-versed in the art of courting a customer base through primarily-online channels, are now at Walmart. And I foresee this trend continuing as Walmart’s ship slowly but steadily steers towards the age of online retail.