Article By: Hayley Peterson
Walmart is adding Lord & Taylor & its many designer fashion brands to its website, the companies announced Monday. The deal is the latest in a series of moves by Walmart designed to target wealthy shoppers, which the retail giant has historically ignored in favor of customers at the opposite end of the income spectrum.
“We see customers on our site searching for higher-end items & we are expanding our business online to focus on adding specialized & premium shopping experiences, starting w/fashion,” Denise Incandela, the head of fashion for Walmart US e-commerce, said in a statement.
Walmart wants to turn its website into a “premium fashion destination,” she said.
The new Lord & Taylor site will launch on Walmart.com in spring 2018. Customers may be able to pick up & return Lord & Taylor items at Walmart stores as part of the deal, according to the Wall Street Journal. Lord & Taylor will also continue to operate its own site separate from Walmart.
Walmart’s race for higher-income shoppers began earlier this year w/its $3 billion acquisition of Jet.com, which attracts a younger & wealthier group of shoppers than Walmart. The retailer has also been snatching up trendy retailers like Bonobos, ModCloth, Moosejaw & Shoebuy.
The acquisitions have all been part of a plan designed to “elevate the Walmart.com brands,” Walmart e-commerce CEO Marc Lore said in October.
The retailer’s strategy of aiming for customers at the furthest ends of the income spectrum highlights the widening gap between wealthy & poor Americans & the disappearance of the middle class, which was once the most sought-after class of income-earners in the country.
The middle class is dissolving
When Walmart was founded in 1962, the middle class in America was thriving.
“From postwar to about the late 1970s, you wanted to be in the mid-tier of retail. That is where everybody was making a fortune, including Walmart,” Doug Stephens, a retail-industry consultant, told Business Insider. “Then from 1980 onward, you wanted to pick a side bc it started to become clear that the middle class was evaporating.”
Contributing to this trend were the deterioration of union jobs, the shift of manufacturing jobs overseas & the growth of the knowledge economy that led to a boom in high-skilled jobs. After the Great Recession, several other factors aggravated the problems facing mid-tier retailers. Consumers started saving more money & mall traffic plunged along w/spending on apparel & accessories.
People started shifting their spending from durable goods to experiences, travel & restaurants. Consumers also started dealing w/higher fixed expenses from increasing technology & healthcare costs. As shoppers’ spending habits changed, the middle class declined. Between 2000 & 2014, middle-class populations decreased in 203 of the 229 metropolitan areas reviewed in a Pew Research Center study.
That’s why today, both high-end retailers & discount retailers are thriving — or at least surviving — while companies that relied heavily on middle-class spending, like Macy’s, Sears & JCPenney, are closing 100s of stores.