Wal-Mart lands online outdoor retailer Moosejaw for $51M

Dive Brief:

Wal-Mart has reached an agreement to acquire outdoor apparel retailer Moosejaw for about $51 million in cash, a deal finalized Monday and announced Wednesday.
Moosejaw, founded in 1992, carries apparel and gear from more than 400 outdoor brands including Patagonia, The North Face, Marmot and Arc’teryx. While primarily focused on e-commerce, the company also operates 10 physical stores across the Midwest.
Wal-Mart said that Moosejaw will continue to operate its website and brick-and-mortar locations as a standalone brand complementing its other e-commerce sites. Moosejaw CEO Eoin Comerford, his executive team and the company’s 350-plus employees will remain headquartered in Madison Heights, MI.

Dive Insight:

Wal-Mart continues gobbling up online retailers in its ongoing quest to resuscitate its flagging e-commerce efforts. The world’s largest retailer forked over $3.3 billion acquisition for e-commerce upstart Jet last year and snapped up online shoe retailer ShoeBuy just last month.

Experts say Wal-Mart is banking on digital commerce to boost its appeal to higher-income consumers and evolve its business beyond its core customer demographic. “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 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.”

Moosejaw presents a particularly intriguing opportunity for Wal-Mart to redefine its online presence. Apparel and accessories now leads all digital commerce categories, according to research firm comScore. Moosejaw also boasts key partnerships in the rising active outdoor category, as well as a range of accessories and gear optimized for activities like climbing, hiking, camping, snow sports, yoga, swimming and biking. Moosejaw is a favorite among millennial shoppers thanks to its creative social media efforts as well as its in-store strategies — for example, one of its stores features a permanent ping pong table and Nerf Gun war zone.

But as always, Amazon looms large. It is now the largest online seller of apparel, with sales exceeding those of its next five competitors — Macy’s, Nordstrom, Gap, Kohl’s and Victoria’s Secret parent L Brands — combined. Cowen & Co. analysts expect the e-commerce kingpin will dethrone Macy’s as the single biggest U.S. clothing retailer sometime this year.

Perhaps most significant, Amazon continues rolling out new private-label efforts of its own, with recent reports indicating it’s poised to add athleisure and fitness lines in the months ahead. A November report from consumer research firm 1010data Market Insights found Amazon private-label initiatives are seeing massive success, even emerging as the online leader in some categories. That could spell serious trouble for Moosejaw and its brand partners in the event Amazon expands its apparel push into the outdoor demographic.

“No matter the market, the challenge for brands in an increasing number of categories is that Amazon is the top online channel,” 1010data Senior Vice President of Marketing Jed Alpert said in a statement emailed last month to Retail Dive. “Reasons for Amazon’s success across different markets vary. In batteries, they have a price-competitive product in a largely commoditized market with little brand loyalty. In speakers, they’ve developed truly innovative products that are redefining the market. The bottom line for brands is they can no longer view Amazon as solely a channel and need to acknowledge Amazon as a competitor.”