Walmart is launching upscale online brands

Walmart eCommerce Sales Growth BI Intelligence

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Walmart is launching its own mattress and bedding brand, dubbed Allswell, with its sights set on affluent consumers, according to The New York Times.

The brand, which will enter the market in March, will be sold exclusively on AllswellHome.com; the retailer doesn't currently have plans to sell the brand in its brick-and-mortar stores, or on Walmart.com or Jet.com. This decision is likely an attempt to build up the brand on its own, without it being affected by Walmart’s low-price image, in the hopes that Allswell will find success with younger and more affluent consumers. Walmart covets these customer groups, and is working to cater to them, as evidenced by its acquisitions of Jet.com and other e-commerce companies.

Allswell will look to succeed in the crowded online mattress marketplace. The mattress industry is estimated to be worth $29.1 billion, and while a large portion of that value is controlled by brick-and-mortar retailers, there are a number of e-commerce brands looking to make their mark, and Allswell will now join that group. Allswell will offer a 100-day free trial of its mattresses, which is table stakes in the online mattress world, and it will need to find ways to stand out from the many other options. Walmart’s backing could help here, even if its involvement isn't immediately evident, as it will likely bring a lot of funding to the brand.
Walmart is also reportedly going to launch an upscale online cosmetics brand, sources told The Washington Post, making this a broader initiative. The brand is said to be named Co Squared, and will target the online beauty industry, likely looking to reach a similar consumer base as Allswell. Launching these two brands as online exclusives represents a new kind of e-commerce push for Walmart.

These new brands represent a shift in strategy for Walmart, as it looks to be moving away from acquiring e-commerce companies in favor of building brands itself. Walmart has spent billions of dollars acquiring companies like Jet.com, Bonobos, and Modcloth. However, the introduction of Allswell and Co Squared makes it seem like Walmart is looking to develop its own successful brands in order to create more organic e-commerce growth following the segment's disappointing performance in Q4 2017. Selling these brands separately from Walmart and Jet.com also shows that Jet.com will not be the hub of all of Walmart’s affluent or millennial consumer-targeted brands, making the retailer's efforts more widespread.

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