Wal-Mart expands e-commerce business with Bonobos acquisition
- Author: Leroy Wright Jun 17, 2017,
Jun 17, 2017, 2:21
Bonobos raised almost $128 million in private financing from venture capital and strategic investors such as Accel Partners, Lightspeed Venture Partners, Coppel Capital, and Nordstrom (JWN), with its most recent round of $55 million finalized in July 2014 at a reported $300 million valuation. The company said it would offer Bonobos brands through its recently-acquired Jet.com division and "possibly other Walmart brands in a variety of countries over time".
It appears Walmart's emphasis on clothing and e-commerce does little to impress investors against Amazon's technological gains and expansion into new industries, such as its latest grocery play.
Targeting Bonobos is a good move for Wal-Mart as it tries to compete with Amazon, which has been quickly expanding its clothing business, Internet consultant Sucharita Mulpuru-Kodal said.
"Our company exists as a series of contrarian decisions", Dunn wrote in a blog post on Medium that was published Friday.
Jet's model is to get customers to make bigger orders by offering larger discounts the more items you add to your cart.
In addition to more digital sales and an expanded customer base, the startups are providing talent and technology, Keith Anderson, VP of strategy and insights at retail intelligence firm Profitero, told Retail Dive. "It probably has as much to do with creating a safe landing for companies that didn't have a path forward as independent entities, but had a nice search authority".
For Walmart, Bonobos offers "a brand with loyal customers, premium price points, and expertise in a differentiated niche", as well as fresh merchandising and fashion talent, Chen wrote in a research note. That means that brands that may want to sell through Wal-Mart have enhanced opportunities too, with options to sell through one site or another (or more), Jariwala said. Now it's trying to catch up with Amazon, the clear leader in that space, while capturing a customer that's younger, urban, and more affluent than the one it already has - the type of bro who buys his work wardrobe at Bonobos, say. And it's not likely to, Kelly-Jo Sands, EVP of marketing technology at marketing firm Ansira, told Retail Dive. That includes Modcloth, too.