Wal-Mart names Rent the Runway founder to lead first Store No. 8 project
Wal-Mart has tapped Rent the Runway co-founder Jennifer Fleiss to helm the first project of its Silicon Valley-based "Store No. 8" retail startup incubator, Business of Fashion reports.
Fleiss, who stepped down from the apparel rental startup last month, is leading the project, dubbed “Code 8,” to realize “high personalized, one-to-one shopping experiences” for the retail giant.
Wal-Mart unveiled its retail startup incubator late last month at Shoptalk 2017, with an aim to nurture and accelerate cutting-edge technologies including virtual reality, drone delivery and personalized shopping.
Wal-Mart-owned Jet has been on a shopping spree of late, most recently acquiring women’s e-commerce apparel and accessories site Modcloth last month for an undisclosed amount, and previously buying online footwear site Shoebuy for a reported $70 million and outdoor e-commerce retailer Moosejaw for $51 million. The retailer also snagged the domain of defunct Canadian online footwear company Shoes.com last week for $9 million and is said to be poised to acquire online menswear retailer Bonobos.
Wal-Mart/Jet's interest in acquiring and incubating e-commerce upstarts seems clearer than ever: Selected investments are appealing brands with customer bases distinct from Wal-Mart’s own. The big-box retailer has long been challenged by the constraints of staying true to its lower-income customer base and expanding its appeal. The Jet deal, as well as the more recent acquisitions, could help attract higher-income shoppers and push beyond the top of its addressable market.
“To move Wal-Mart upmarket is a Herculean task,” retail futurist Doug Stephens, author of the forthcoming book “Reengineering Retail: The Future of Selling in a Post-Digital World,” told Retail Dive last year in the wake of the Wal-Mart/Jet deal. “Any time they do, they risk losing their most loyal customers. They’ve wound themselves in a corner by virtue of just how strong their brand essence is in the market. When you say ‘Wal-Mart,’ it brings up such clear connotations. For some people it’s what they want, and for some they want nothing to do with it. Buying Jet.com is an attempt to break free from Wal-Mart’s customer base.”
But acquiring Jet — and now these other efforts — is hardly Wal-Mart’s first attempt at widening its appeal to deeper-pocketed customers. Eight years ago, the retailer launched “Project Impact,” an effort to improve the quality of its apparel and home furnishings, clean up stores and present friendlier customer service. It was widely seen as a disaster. Before that, Wal-Mart placed ads in Vogue magazine in 2005 and sponsored a New York City fashion show to highlight new, higher-priced apparel lines. The result? Another disaster, another retreat.
Wal-Mart could be hoping to avoid such pitfalls by positioning Jet as an alternative that will appeal to a different customer bracket. Acquisitions like Modcloth and Shoebuy are the speediest and easiest way for Wal-Mart and Jet to reach their goals, according to Profitero VP of Strategy and Insights Keith Anderson.
The retail giant's foray into incubating tech startups comes as rival Target is scaling back its own efforts in the space. Target’s chief innovation and strategy officer Casey Carl, who was a guiding force behind Target's LA25 "store of the future" program and other innovation endeavors, will leave the retailer early next month. His departure comes after Jason Goldberger, the retailer's chief digital officer, left the company last year after only a few months on the job. The shakeup comes as Target attempts to shift its innovation focus from futuristic pilot projects and long-term visions to programs, ventures and growth opportunities that can have a nearer-term impact on the retailer’s core business.
- Business of Fashion Rent the Runway Co-Founder Joins Walmart Incubator
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