Outdoor enthusiasts love adventure, but the thrills and chills associated with a recent dustup among several outdoor brands, high-end retailers, and Walmart might not be quite what they expected. Let’s consider the perspectives of all three of these actors.
Walmart, in its effort to become all things to all consumers (and compete better with Amazon, of course), has actively sought to expand the range of products it sells online, including high-end camping, hiking, adventure, and sports gear. It purchased a smaller retailer called Moosejaw, known for selling premier equipment, and created a dedicated section of its website to sell the high-end, expensive gear that this retailer had gained a reputation for
providing. It added a range of relevant products, including Black Diamond climbing tools and Deuter backpacks. The products were only available online, not in stores.
Other retailers, recognizing the presence of these brands on the Walmart site, raised a vehement protest. They argued that by being affiliated with Walmart, the brands would also be linked to the retail giant’s well-known low price image. But these retailers have no interest in a low price positioning; instead, they charge high prices for excellent equipment. If the equipment is something people can get at Walmart, they might no longer perceive that it is worth the high price. Furthermore, Walmart’s reputation for forcing suppliers to lower their prices led them to anticipate that the goods would ultimately be for sale at much lower prices on the Walmart.com site.
In response, the brands themselves have faced a tough dilemma. If they decide to keep their existing retail partners happy by withdrawing themselves from Walmart, they lose access to the massive market of consumers who frequently visit Walmart, potentially limiting their growth. But if they remain on Walmart.com, they risk alienating their existing retail partners and potentially undermining their own reputation as a high-end brand. Thus far, approximately one-third of the brands that initially appeared on Walmart’s dedicated outdoor gear page have asked to be removed.
Walmart insists that it sought and received permission from every brand it featured, before it put them on its ecommerce site. It also engaged in proactive efforts to convince some of them, yet even after they agreed, these brands changed their minds when confronted by the severe blowback from their other retail links. Even the retail industry association for outdoor gear got in on the action, calling on its members to refuse to sell any brands that also appeared on Walmart.com. But Walmart believes these moves are short-sighted, noting that consumers today expect to find whatever products they want in multiple channels. If the brands limit themselves to specialty retailers, they also might be limiting their chances of survival.
Discussion Question:
- Why are brands upset that Walmart is selling their products?
- If you were one of these high-end brands, would you continue to sell to Walmart? Why or why not?
Source: Sarah Nassauer, The Wall Street Journal, September 7, 2018