What's shaping the e-commerce landscape?

The last time Walmart refreshed its brand, the Great Recession loomed large, the iPhone was only a year old and a hyphen still split the retailer’s legal name. In early 2025, the big-box store unveiled the latest update to its visual identity, one meant to embrace the growing role that digital and cross-channel capabilities play in an industry that has seen its makeup altered by technology over the past two decades. 

“It’s more about aligning the visual expression with how the brand has evolved since 2008,” said David Hartman, Walmart’s vice president of creative, of the changes. “What that means, in a more practical sense, is really establishing ourself as truly an omnichannel retailer versus just a brick-and-mortar retailer and being able to serve the customer no matter where or how they want to encounter the brand.”

Included in the 2025 refresh are more vibrant yellows and blues (technically True Blue and Spark Yellow), a bigger emphasis on the sunburst-like “spark” icon Walmart implemented in 2008 and a new wordmark echoing one found on a trucker hat frequently sported by company founder Sam Walton, including on the cover of his book, “Made in America.” The Walton nod was inspired by Hartman’s team at Walmart Creative Studio taking a deep dive into the corporate archives to find something that could connect heritage to the brand’s current vision. The new typography is a custom design based on the font Antique Olive that Walmart is calling Everyday Sans. 

“There is a great, unique origin story about that typeface, its roots in our past and how we’re bringing it forward to represent the brand where it is today,” Hartman said. 

The Walmart spark appears largely the same as before but will play a different role in branding, with wider separation from the Walmart name on assets like storefronts. It’s a move intended to reinforce the logo’s status as a stand-alone symbol that can shore up Walmart’s brand equity, according to Hartman. Other retailers have created easy visual shorthands for their brands, such as Target’s bullseye or the Amazon smile.

Jones Knowles Ritchie assisted with Walmart’s brand identity overhaul while Landor partnered on aspects like store executions. Publicis Groupe handles core marketing and advertising services.

Digital-first evolution

While Walmart’s makeover is perhaps less dramatic than some past tweaks, such as ditching its hyphen and bowing the spark, it speaks to changing priorities for a company traditionally known for sprawling superstores.

“It’s not a wholesale reinvention of the Walmart identity. It’s very much an evolution versus a revolution,” Hartman said.

Walmart’s focus on digital has accelerated since the launch of membership service Walmart+ in 2020, a response to Amazon, and the larger consumer gravitation toward online shopping, which has supported the firm’s bigger crack into areas like selling advertising.

Walmart’s e-commerce sales in the U.S. were up 22% in Q3 2025, extending a run that has dazzled investors. “If it ain’t broke, don’t fix it” is an adage that could generally apply to brand marketing, but the company still saw aspects of its appearance where modernization felt important and spent the past year-plus hashing out what those changes should look like.

In a press statement, Walmart U.S. Chief Marketing Officer William White described a goal of becoming an “inspirational, digital retailer” — comments echoed elsewhere in the refresh announcement. 

“The updated brand identity will help Walmart build credibility and connection, become known for its convenient digital-first services and be seen as a more modern, culturally dynamic brand,” states a press release. 

Vying for vibrancy

On the brick-and-mortar front, Walmart is introducing full-colored illustrated murals into store locations to add a pop of storytelling and aid customers in navigating different departments, a shift away from a previous system that relied on icons and line work. Some of these elements have been present at Walmart’s experimental Store 4108 in Springdale, Arkansas, since October 2024, but will roll out more widely later. 

“We’ve heard from customers who are shopping in that [4108] store and the store associates that it’s really helped improve the overall customer experience,” Hartman said. “Customers describe it as feeling more warm and more inviting when they enter the store.”  

The embrace of elaborate, brighter visuals is part of a larger industry shift away from the minimalism that underpinned many branding efforts throughout the 2010s. For a rebrand in 2023, Pepsi introduced electric blues and deeper blacks, a different wordmark and decorative packaging that pivoted away from a previous focus on simplicity.  

In other areas, Walmart’s aim is to deliver greater consistency and a user-friendly experience across channels like its app and Walmart.com, some of the earliest places where the refresh will go live. A modular grid system for browsing will display product images, photography and headlines, among other tweaks to what Hartman termed Walmart’s “brand operating system.”

“When [consumers] encounter the brand on the app, what they see from a product expression and a brand identity looks very similar or close to the same as what they see in our marketing and what they see in our store experience,” Hartman said of the refresh. “When you think about digital and omnichannel, we want to make those visual connections as tight as we possibly can so it feels like a seamless experience to the customer.”

The new look for Walmart will factor into its Q1 marketing campaign and activations, Hartman said, without offering specifics.

“We’re going to be very strategic about what assets get transferred and when,” Hartman added. “It’s not going to be an overnight change. It’ll definitely be something that happens over time.”

Retailers’ ability to offer customers many happy returns is becoming more difficult and costly.

Total returns in retail amounted to $743 billion in 2023, according to a report from the National Retail Federation. That equates to $145 million in merchandise returns for every $1 billion in sales. In 2025, shoppers are expected to return $890 billion in merchandise, which represents nearly 17% of retailers’ annual sales, according to a recent NRF report.

Faced with the escalating challenge of returns, retailers are taking diverging approaches to dealing with the issue. And while not all returns involve fraud, that is one of the issues retailers are addressing. Most of the retailers surveyed in the NRF’s latest report said return-related fraud and other exploitative behavior was an issue for their business. 

“The rise in e-commerce shopping has led to an increase in return rates and volumes across most categories because online shoppers can’t touch and feel products before they buy,” David Morin, vice president of customer strategy at returns company Narvar, said via email. “The notion that ‘the living room is the new fitting room,’ where consumers try items at home before deciding whether to keep them, has led retailers and brands to review their return programs, including tightening their return policies.”

Buying multiple items with the intent to return some of them, also known as bracketing, has grown among younger people, the NRF found, with 51% of Generation Z consumers acknowledging they’ve done it. 

Morin said Narvar’s research has found rising rates of what it terms “friendly fraud” — behaviors like bracketing or wardrobing, where someone buys and wears an item with the intention of returning it. But Narvar also found rising rates of potentially criminal return policy abuse.

“The increase in fraud, along with the heavy incurred costs to retailers, is driving a larger focus on strategies that identify potential fraudsters and create unique workflows to deter the behavior,” Morin said. “Retailers are also balancing out strategies that still reward trusted customers to maintain the sense of ‘peace of mind’ that is critical in returns.”

Indeed, a return abuse or fraud crackdown must be balanced with maintaining customer experience, Katherine Cullen, the NRF’s vice president of industry and consumer insights, said in the organization’s latest report. Other experts echoed that perspective.

“Although Amazon, REI and Target and others have tightened their return policies this quarter to ‘combat fraud,’ the Gen Z and Alpha customers still expect to have a satisfactory and easy ability to return unwanted items in an efficient manner whenever they please,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University of New York, told Retail Dive in an email. “This is part of their seamless retail shopping experience of which they have grown accustomed.”

Who gets hit the hardest by returns? 

Some categories in particular are more vulnerable to returns. For example, several analysts told Retail Dive that apparel makes up the majority of retail returns.

“This is for multiple reasons,” Neil Saunders, managing director of GlobalData, told Retail Dive in an email. “Sizing is a major issue, especially if buying online, and many consumers will buy multiple sizes and return the ones that don’t fit. How things look in person is important in apparel, and this is another factor driving returns.”

Returns also peak during certain time periods. Besides the holiday season, Saunders said returns typically surge after big promotional periods, like Amazon’s Prime Day. Apparel also follows seasonal trends, which may drive upticks in returns as consumers buy new outfits for the changing seasons, Saunders said. 

Additionally, the prevalence of online apparel shopping and an inability to try on items before buying contributes to high return rates in the category, as do consumers’ expectations on issues like fit, color and fabric, Jonathan Zhang, a professor at Colorado State University’s College of Business, told Retail Dive in an email. 

And for the same reasons — look and feel — Zhang said home goods, like furniture and decor, also have high returns. “Items in this category are often returned due to damage during shipping, mismatched expectations about size or color, or changes in customer decisions after seeing the product in their home environment.”

Services like Stitch Fix that allow shoppers to try on apparel at home before purchasing came about to help solve this problem. Yet many such offerings have shuttered in recent years. Amazon also made a major change this month involving its own apparel try-on service. The retailer plans to phase out its Try Before You Buy service in early 2025. The program allowed Prime members a seven-day trial of select apparel, shoes and accessories. Amazon said it’s ending the service as an increasing number of customers turn to AI-powered features like virtual try-on as they shop for apparel.

Regardless of the driving factors for returns, the rising tide of returned merchandise also poses a sustainability issue for retailers. More than 11% of the $100 billion worth of purchased apparel that’s returned to retailers eventually ends up in a landfill, according to research by Equal Ventures, a venture capital firm.

“Consumers are increasingly aware of the environmental impact of returns, such as waste from disposed products and emissions from reverse logistics," Zhang said. “Retailers are under pressure to address these concerns, either by encouraging exchanges over returns or by implementing fees to disincentivize habitual returning behaviors.”

How are retailers responding?

During the last couple of years, retailers across the industry have made some noteworthy return policy changes. A key driving factor, according to industry experts and retailers themselves, is the escalating cost and volume of handling returned merchandise.

In 2024, Morin said Narvar saw about 25% more retailers charging for return shipping. Many others shortened their return windows, especially retailers that had policies longer than 30 days. 

“Rising return costs and fraud are pushing retailers to overhaul their policies,” Zak Stambor, a senior analyst for retail and e-commerce at Emarketer, said in an email to Retail Dive. “While many have rolled back free returns, others are taking more targeted steps to cut costs and curb abuse.” Stambor added that the nuanced approaches retailers are employing “reflect the growing pressure on retailers to balance customer satisfaction with operational efficiency.”

Here’s a snapshot of some of the changes retailers made to their return policies in 2024: 

• Walmart said it has increased return shipping rates for its third-party sellers. Additionally, the retailer said its Walmart Marketplace sellers can allow customers to keep items and receive a refund, thus avoiding the need to pay for return shipping.
• Amazon in August said sellers using its fulfillment services can now issue product refunds without requiring customers to return the item. The move avoids sellers having to pay for the reverse logistics of accepting returned merchandise.
• Kohl’s began accepting Amazon returns at all of its locations in 2019. Last year, the department store chain added an additional return service in partnership with Narvar and Inmar Post-Purchase Solutions, which allows customers to return items from several brands to Kohl’s stores, including Carhartt, Hanes and Levi’s.
• REI said in November that it is now declining returns from a “small subset” of its members. These individuals have repeatedly abused REI’s policy, the company told Retail Dive in a statement. The people in question represented less than 0.02% of REI’s 24 million members but had an average return rate of 79%.

Data analytics advancements are now enabling retailers to identify and address return patterns among specific customer segments. Zhang said advancements in data collection make personalized return policies a possibility in the near future, although he cautioned the data should be handled carefully and decisions should be based on actual behavior to avoid any perception of preemptive discrimination.

Morin said another significant factor is that regulations on handling consumer data are becoming stricter. That’s making first-party customer loyalty program and membership data more valuable — and more costly to acquire.

“Loyalty and membership programs are some of the most valuable sources of first-party data for merchants, but consumers, especially younger generations, are increasingly mindful about sharing their data and may only be willing to provide personal information if they perceive the value exchange is equal.” 

Morin said some retailers are launching more incentive-based loyalty and membership programs with built-in returns benefits such as free shipping in response to concerns about data privacy. Better logistics and automation could also make the retail returns process faster, more seamless and more consumer-friendly by the end of this year, the NRF forecast in its report.

Saunders said a leading factor that’s likely to shape future return policies are changes in the cost and volume of returns, along with how rival retailers are responding. “The aim of any retailer is to reduce returns, but this must be balanced against protecting sales,” Saunders said. “Return policies that are too onerous can cost retailers sales.”

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All e-commerce leaders want to see their businesses grow. That requires a shipping solution that can not only keep up with the challenges growth can create, but also help e-commerce businesses unlock new benefits as they expand.

Choosing a shipping solution designed with the needs of e-commerce businesses in mind can help leaders scale their businesses with minimal disruptions to their workflows. A scalable shipping solution offers e-commerce businesses the integrations, insights and customizability they need to optimize costs and keep up with higher order volumes as they grow. 

Integrations

Whether they’re shipping five packages per month or 5,000 (or more), e-commerce businesses need clear visibility into orders. That can be challenging to achieve without using a shipping solution that offers integrations to those businesses’ shipping carriers, e-commerce platforms, warehouse management systems, enterprise resource planning systems and IT systems.

For example, ShipAccel, a one-stop shipping solution powered by Pitney Bowes, integrates with 80+ partners to meet e-commerce businesses’ shipping needs. 

“Whether our customers need to connect to Shopify, Amazon, eBay or any of our other partners, they’re able to connect their stores and import all of their orders” said Gitika Jain, VP, Shipping Portfolio at ShipAccel powered by Pitney Bowes. “With everything streamlined into one place, e-commerce businesses can see all of their orders and ship them from a single app.” 

Customizability

E-commerce businesses’ internal workflows tend to become more complex as they grow — with multi-location businesses having different needs and processes than smaller ones. The right e-commerce shipping solution can offer businesses of all sizes the ability to use customized automation rules to rise to their changing needs.

In shipping scenarios, automation rules enable e-commerce businesses to use if-then logic to create “catchall” rules ensuring similar orders are all handled the same way. 

“If you regularly ship to international destinations – like Canada, for example – you can use automation rules to ensure your orders are always shipped using a specific carrier and service that offers most optimal cost and SLA for your international shipping needs.” said Jain. “There are many business rules you can use to ensure your shipping approach is customized for each and every order and streamlines how your operations work.”

Other customization opportunities can help e-commerce businesses ensure their brands remain top-of-mind for customers throughout their entire shopping journeys — even into returns. Using ShipAccel, for example, enables e-commerce businesses to create branded return experiences for their customers, complete with branded tracking features built into their business’ websites. 

Insights

The right e-commerce shipping solution can also empower business leaders with analytics and insights that help them identify and take action on cost optimization opportunities. 

For example, "If you have multiple locations and need to see which warehouses you are shipping the most from, or which ones have the highest shipping costs, our analytics will help you identify shipping cost optimizations." Jain said. “These insights are critical to make informed decisions about your operations and spotting cost cutting opportunities.”

Those informed decisions could range from opening up a new warehouse in a high-volume location to negotiating new rates with a carrier.

Conclusion

When it comes to shipping rates at large, some smaller e-commerce businesses might benefit from the group rates available from a shipping solution whereas larger businesses might already have specialized rate cards. Ideally, their shipping solution should be able to support them in either scenario. 

Ultimately, e-commerce businesses have many options when it comes to which shipping partner they choose. But working with one that can remain a partner throughout their entire growth trajectory can help them minimize costs, avoid workflow disruptions and keep their operations streamlined over time.

“While you can have any shipping solution at any point in your journey, having one that can seamlessly partner with you through every stage of your company’s growth and success is imperative,” Jain said.

ShipAccel, powered by Pitney Bowes, is the one-stop shipping solution for e-commerce businesses. Learn how working with ShipAccel can help you save on rates, automate your workflow and supercharge your growth at shipaccel.com. 

At a time when AI is dominating headlines, apparel box e-retailer Stitch Fix has rebooted its customer experience model by emphasizing its human stylists.

For several months, CEO Matt Baer has hinted at an overhaul, saying the company was “rethinking every interaction.” In a blog post, Baer described a suite of changes, spanning merchandising and marketing, as just the beginning. At the same time the company also unveiled a new, sans-serif logo.

“We are now in the midst of a transformation at Stitch Fix, which includes reimagining how we engage with our clients – from the clothing and accessories we offer to how we bring those styles to them,” he said. “Today, we are beginning to introduce a more modern and dynamic Stitch Fix, and I’m proud to announce the first in a series of changes we’re making to our client experience.”

Merchandising changes

The apparel box subscription model — where the retailer curates a box of clothing and accessories for customers who sign up for the service — seems to have largely fallen out of favor. Nordstrom and ThredUp have abandoned the idea, and some startups in the space have simply disappeared.

Stitch Fix, too, has struggled. In 2023, even before hiring Baer away from his post as Macy’s digital chief, the company walked back several initiatives that were meant to stoke growth but instead alienated many customers. In fiscal 2023, sales fell 21%, the number of active clients fell 13%, net revenue per active client was down 9% and narrowing losses were based on drastic cost cuts.

Despite growing skepticism among some analysts, though, Stitch Fix has held on. Since its start, the company has sent five items per box, charging $20 each time and providing free delivery and returns, at a cadence of customers’ choosing. Now, clients can opt to get up to eight items in each box, which Baer said would help Stitch Fix better address demand for seasonal and special occasion items.

The e-retailer is also expanding its private brand portfolio, which the company has long said is key to its differentiation and important for margin expansion. Montgomery Post is a new women’s workwear label, while The Commons will offer “elevated and trend-right styles for both women and men,” per Baer’s post. Three of its most successful owned brands, Market & Spruce, We Wander and 01.Algo, will expand to include children’s apparel, he said.

The company will also broaden its assortment via third-party brands, according to Baer's post.

Leveraging the data trove

In the past, some analysts have said that Stitch Fix hasn’t taken full advantage of the flood of data it has accumulated over the years. With this overhaul, that seems to be changing.

First, Stitch Fix is capitalizing on the initial style quiz that clients must take when they sign up. After customers finish the quiz, they will get what the company is calling their StyleFile, “a personalized snapshot that shares their individual style personality and the specific elements that contribute to it.”

The company said it has tapped its data reserves “to identify a broad range of personalities, from Timeless Trendsetter to Carefree Casual,” and will peg each customer to the StyleFile that suits them best. This starts with new women’s clients, with men and existing clients getting their StyleFile assignments later, the company said.

Second, each customer will also receive “a new, digital Style Card that provides clients with personalized, shoppable outfit ideas built around items sent in their individual Fix, as well as previously purchased items.”

Spotlight on stylists

Finally, Stitch Fix says it is putting more focus on its stylists, the latest answer to its longstanding challenge of how to balance its tech versus its humans. This comes after 2023’s layoffs, ending full-time work for stylists and generally rising tension over what to reveal to customers about the role of the company’s algorithm, which in many cases is responsible for previews of what will go into the boxes.

“From the beginning, Stylists have been at the heart of Stitch Fix,” Baer said in his blog post this month. “As we reimagine our client experience, we are increasing the visibility of our Stylists.”

The company will start to provide a profile for each stylist that features their “unique expertise and work portfolio, as well as related interests,” he said. This also includes an option, now being tested, for stylists to upload their photos, which will be seen by clients whose boxes they’ve curated, according to a company spokesperson.

“This test has resulted in positive feedback from clients and Stylists alike, helping to create deeper relationships and a better styling experience for both,” the spokesperson said. “This feature is being created in close collaboration with our Stylists to celebrate each person’s individuality and expertise, and we’ll continue to work with them to incorporate their feedback.”

For now, uploading a photo is not a requirement of the job, but Stitch Fix is mulling that, per the spokesperson. A stipulation that the company be allowed to use such photos “in perpetuity” is being reviewed after pushback from some stylists, the company said. Regardless, a photo would only continue to be used in the context of past Fixes, which could include Fixes from a stylist who has left the company, per the spokesperson.

This follows an influencer playbook that some observers suggested for Stitch Fix years ago. For certain stylists that may be an opportunity, though it brings up some issues, especially for those who might choose to communicate with clients through their private social media accounts, according to Sarah LaVoi, a partner at law firm BakerHostetler’s advertising and digital media practice, and co-leader of its retail industry team.

“As the employee, you do have to think about that. ‘Do I want to be a content creator? Can I give an honest, accurate overview of my employer's goods and services?’” LaVoi said by video conference.

A company must also weigh the pros and cons, since they lose some control if employees communicate via their own accounts. Still, the approach also has its roots in old-fashioned retail, she said. It’s an effective way for Stitch Fix to approximate online the classic encounter between a salesperson and store customer, according to LaVoi.

“For Stitch Fix, it really is part of the role as a stylist in this social media, digital, interactive context,” she said.

AI has changed what Walmart can do with search. 

About a month after debuting the technology, Walmart CEO Doug McMillon said the company was already seeing results. McMillon said during a 2024 earnings call that “help me buy a Valentine’s Day gift” was one of the most popular searches in February that year. “And rather than searching separately for things like chocolates, a car, jewelry, flowers, the search returns a list of results that are relevant and curated,” McMillon said.

The retailer began deploying generative artificial intelligence in late 2023 to answer customers’ mission-based searches and empower frontline employees with information that enables them to serve customers better and in real time.

Generative AI can make connections and serve results to customers with context and personalization, Jon Alferness, chief product officer for Walmart U.S., told Retail Dive in an interview. The technology can also help customers identify what they want to buy and discover new products. Alferness said the company’s data backs up why advancing the implementation of generative AI-powered search is important.

Customers regularly ask mission-based shopping questions, Alferness said. Before integrating AI into search, “the answers that we were giving our customers were OK but not great,” he said.

That is changing.

Empowering associates with AI

Alferness said Walmart has also deployed generative AI to empower its associates with more information that can help them better serve customers. The technology serves as a cheat sheet for customer interactions by bringing all the tools an employee might use under a single umbrella to offer contextualized answers to customers’ product questions.

For example, Alferness said, a customer might come to a store and ask an associate for help searching the aisles for a specific toy tied to a TV show or a movie but they can’t remember anything – the show, the movie or the character’s name. But AI can help find what a customer wants.

“We don't want our customers to have to think about the complexity behind the scenes,” said Alferness, whose past experiences include multiple roles at Google. “I think the magic of all of this is done really well when it is natural, fluid, frictionless.”

Associates can also use AI to get an answer if a product isn’t on the shelf. Within moments, they can find out if the supplier is out of inventory, if the product is on its way to a store on a truck, or even the approximate time it’ll get moved from the truck to the backroom and then a shelf on the sales floor. Connecting all those dots requires the power of AI.

Walmart said its generative AI technology analyzes customer intent based on query, session and engagement. It then uses that information to create a holistic product offering in categories to serve results that cover a customer’s needs without overlaps or gaps.

“The technology goes beyond the typical word matching and can detect much more complex relationships and connections,” Tom Taulli, the author of “Generative AI: How ChatGPT and Other AI Tools Will Revolutionize Business,” told Retail Dive in an email. “This is mapped to natural language prompts. In other words, this is a much better search experience.”

Walmart’s deployment of the technology could be a template for the future of retail, Taulli said.

“Generative AI is a transformative technology,” Taulli said. “Millions of people have seen the power of ChatGPT – and this has raised the bar for AI applications,” Taulli said. “For companies to remain relevant, they will need to adopt these powerful technologies.” 

Generative AI in retail still early stage

Just 4% of retail leaders said AI isn’t an important consideration, according to a survey of 1,100 retail industry decision-makers by Algolia and Coleman Parkes Research. Another survey by Adobe found that 58% of respondents said generative AI improved their online shopping experience. Half of those surveyed said they’d use the technology to help them buy clothes.

“In many respects, Gen AI is already an essential part of advanced retail strategies,” Bernard Marr, a generative AI expert and author, told Retail Dive in an email. “It integrates various data points — from browsing habits to purchase history and even real-time behavior — to deliver a cohesive and customized shopping journey. As retail continues to evolve, the adoption of such technologies will become not just advantageous but necessary for staying competitive and meeting the increasingly sophisticated expectations of consumers.”

Taulli said retailers and customers alike benefit from generative AI’s rising implementation.

“One natural language prompt can instruct the generative AI to create a plan that is personalized and based on certain constraints, like costs,” Taulli said.

However, Taulli said generative AI’s use in retail is still in the early stages and it will likely be a few years before it’s a core part of the industry’s overall omnichannel strategy. One reason: deploying generative AI models based on a company’s proprietary dataset is still a complicated task.

Generative AI is part of ‘what customers expect’ for the future of retail

During an earnings call, McMillon said Walmart is “very excited about generative AI,” and sees “big opportunities” to improve experiences for customers and associates, boost productivity and reduce costs for the business. 

Walmart is far from alone in pursuing AI initiatives. Best Buy announced last month that it’s partnering with Google Cloud to introduce a virtual assistant and AI-enhanced customer support. Amazon CEO Andy Jassy said in April that the company plans to deepen its investments in generative AI and views the technology as a foundational element of better customer experiences.

Additionally, generative AI’s power to bridge the gap between online and in-store experiences is a key reason the technology “is becoming an essential component of omnichannel retail strategies,” Marr said. “It bridges the gap between online and in-store experiences, ensuring that customer interactions are seamless, personalized, and responsive across all channels.”

Marr said Walmart’s adoption of generative AI reflects its transformative role in retail. 

“Generative AI is crucial for Walmart's future as it enables the company to enhance the shopping experience through personalized recommendations, optimized inventory management, and improved customer service interactions,” Marr said.

Automating and tailoring those aspects, Marr said, enables Walmart to increase efficiency and deepen customer engagement, and those issues are “vital in today's highly competitive retail landscape.”

In 2019, DTC brands Casper, Away and Glossier were touting $1 billion-plus valuations, all of them reaching that threshold within five years of being founded. They were riding high on cheap capital, a strong economy and the hype the direct-to-consumer model had generated.

The next couple of years would see Casper go public, alongside retail darling Warby Parker and sustainable footwear brand Allbirds. At the same time, all three trumpeted big plans for brick-and-mortar footprints and category expansion, and touted the strength of the DTC model. 

It seemed DTC brands could do no wrong. Then, things changed.

Casper was sold to private equity just two years after it went public, Allbirds announced store closures and a shift to a “more profitable” distributor model globally, and Outdoor Voices abruptly shuttered its fleet of stores before being snapped up by the same firm that owns Draper James.

“Everyone believed the mantra should be DTC or die because they wanted to eliminate the middle person and make more money,” Simeon Siegel, managing director at BMO Capital Markets, said. “What they finally realized was: No one eliminates the middle person, they simply become the middle person, and that brings its own set of costs. So for a period of time, people became so obsessed with where they sell rather than what they sell that they lost track of who they were.”

Precipitous sales declines at former disruptors, including those buoyed by the pandemic like Peloton, became somewhat of a norm. The bike company and its peers also grew steadily more interested in other sales channels, including Amazon and more traditional wholesale partners. The more established brands that had jumped on board the DTC bandwagon when it was chugging along also began pulling back, recognizing some of the same challenges, and the allure of purely DTC brands faded.

“If Allbirds had remained on its strong growth trajectory, if Peloton had maintained the growth tear it was on, the models probably wouldn't have pivoted that much. But they did change — and both companies fell into difficulties,” GlobalData Managing Director Neil Saunders said, noting those challenges pushed both brands to expand their sales channels. “Now that genie has been let out of the bottle, it's not going to be put back in.”

Even brands like Lululemon, which sells mostly DTC, have wholesale accounts, Saunders noted. “The term DTC is still used as a shorthand. I'm just not quite sure it's all that relevant now,” he said.

Asked if we’ll still be talking about DTC brands in five years, Siegel put it more bluntly.

“In a derogatory, backwards-looking fashion? Sure.”

What went wrong

As the direct-to-consumer model matured, a slew of factors that helped DTC brands flourish began waning. The general retail market slowed, customer acquisition costs on social media surged, venture funds dried up, the cost to fulfill online orders grew and brands started hitting their own growth ceilings.

“There's a lot of things that moved and shifted in a relatively short period of time that meant that DTC went from being almost the darling or the hero of retail, to being a channel that had a lot of challenges and problems,” Saunders said. “And had a lot to prove that it wasn't necessarily, in some cases, proving.”

The model itself was flawed from the start, according to Siegel, whose firm has done multiple reports on the impact selling direct-to-consumer has on key metrics like gross margin. Critically, Siegel found that brands pivoting to direct did not see a relative increase in revenue, gross profit, gross margin, operating profit or operating margin.

“It just didn't happen. Back then, obviously, that was controversial — and it triggered a lot of fights,” Siegel said. “But now people are looking at the results and they're acknowledging wholesale, when done right, is truly a powerful thing.”

Some up-and-coming brands, including Vuori, may have dodged some of the growing pains in the sector by embracing wholesale from the start. Founder Joe Kudla has said before that the company saw a place for key wholesale partners from the beginning of its business and touted those relationships as part of the reason it was able to achieve profitability.

“The partners we selected at the start in the U.S., and those we work with today globally, are very intentionally picked, and our distribution is deliberately limited to only the best accounts,” Andy Lawrence, vice president of international at Vuori, said via email. “While I wouldn’t say wholesale insulates any brand from all DTC challenges, at Vuori, it does add a critical component to our success. Wholesale, if done correctly, allows brands like us to connect authentically with the local customer.”

Still, for a time many DTC brands simply didn’t invest in wholesale as a channel because selling directly to consumers was working. And investors were enthusiastic about funding DTC brands, profitability challenges or not, because capital was cheap and consumers had disposable income to spend on new brands and discretionary products.

“There was so much money sloshing around, it was very difficult to do badly,” Saunders said. 

But in a more discriminating market, the value proposition of some of retail’s startups became far more important — and was often found wanting. Expensive exercise bikes and fancy sheets are harder to sell in a more risk-averse economy.

“It's very important not to confuse problems with DTC — which, there are problems — with problems with the brand,” Saunders added. “Allbirds primarily has a brand problem. It doesn't really have a distribution problem, as such. So Allbirds could push itself into more stores, do more things — it's still not going to resolve the issues of the company because the problem is with the product and the position and the brand, it isn’t with the distribution method.”

As startups and traditional brands alike recognize the limits of DTC, many are embracing a more measured model that values both DTC and wholesale. The sensibility of that approach has been touted frequently over the past few years as brands have moved away from strictly digital approaches, with one report earlier this year saying wholesale is still the most profitable investment channel for brands.

Matt Katz, a managing partner at SSA & Company, describes what’s happening now as a “reset” driven by overinvestment in DTC and underinvestment in stores. The importance of stores and wholesale is now sending investments back in the other direction, and retailers are unlikely to lean back into DTC as hard as they did — that is, unless investors start funding it again.

“Silly as it sounds, people chase simplicity when it seems to be intuitive. This is not the first time, and it certainly will not be the last time, that everyone chased a buzzword,” Siegel said. “When companies don't need to be profitable, profit and loss statements are not scrutinized. When companies don't need to be profitable, expenses are not scrutinized. That makes it much easier to chase a hope and a belief versus being held accountable for the actual results.”

A reality check for DTC — and wholesale

The swing to DTC — and the correction since then — has taught both brands and wholesalers some important lessons. Take Nike, for example. The rise of DTC brands spurred a huge investment from the sportswear giant in its own digital capabilities and stores, and at the same time caused Nike to cut ties with a slew of wholesale partners it deemed less important to its overall strategy.

First, that led to exceptional growth. Then came a retraction, as Nike determined it had taken things too far and, in fact, did need those wholesale partners after all. Throw in layoffs, a cost-savings plan, a lawsuit surrounding the success of the DTC strategy and an abrupt CEO swap and you have a pretty good summary of the fallout to date.

“DTC serves a lot of Nike customers, but it doesn't serve all of Nike's customers. A lot of product discovery, a lot of buying of Nike products is done by people who might go into a department store, especially some of the older age cohorts,” Saunders said. “These people are not going to go online directly to Nike. They want to buy it through the channels that they shop in. And if Nike disappears or pulls back from some of these channels, they lose the sales — it's as simple as that. And they underestimated that. They were almost a little bit arrogant as to the power of the Nike brand.”

And make no mistake, Nike is a powerful brand. A $50 billion-a-year brand. 

But as Nike was learning its lessons, both good and bad, about DTC, its wholesale partners were also learning theirs. Foot Locker, one of the retailers Nike spurned and is now again seeking closer ties with, has unveiled its own turnaround actions to lure brands to its shelves, including revamping two-thirds of its Foot Locker and Kids Foot Locker stores over the next few years. Macy’s, too, which received similar treatment from Nike, has been undergoing store refreshes at its go-forward locations as it looks to keep customers and brand partners coming back.

“I think that the wholesale side really had to pull its socks up as well,” Saunders said, noting that retailers like Macy’s and Foot Locker have realized they are “serving two masters” now. “‘One of our masters is the consumer, but the other master is the brands. Because the brands don't have to be in our store necessarily and what we've got to prove to them is that we're a worthwhile partner.’”

Indeed, while the pendulum has swung back toward wholesale, some brands are still moving away from certain retailers and could continue to do so if their partners don’t serve them well. Levi’s in its Q3 earnings report touted that its wholesale business now makes up less than 20% of its revenue, down from 30% in 2015. Analysts at the time pointed to Levi’s sales and profit growth as a sign that its DTC strategy is working, at least for now.

“I think we've moved from retailers having the advantage. The retail-brand wholesale relationship used to be heavy, heavy retail. That was your point of distribution and the retailer chose which brands were most important, right?” Katz said. He noted that the balance shifted when brands developed their own access to customers through DTC. Now, Katz says, the consumer is in charge. “Consumers have taken over the leverage point and they are buying on availability and price and experience.” 

That means brands need to focus on being wherever the customer wants to buy, which might sometimes be wholesale and might sometimes be DTC and might sometimes be Amazon. 

During the height of DTC mania, companies like Nike and Adidas became very focused on what percentage of their revenue was DTC versus wholesale. Nike had a goal of upping DTC from 40% of its revenue to 60% by 2025, while Adidas aimed to reach a 50% DTC split by the same time period. Even with wholesale coming back in vogue, there is no universal answer for what that split should be, according to Siegel, and brands should be adjusting those percentages based on their individual needs.

Having a strong DTC business also doesn’t have to come at the expense of wholesale. For Vuori, having wholesale partners has helped it gain brand awareness in new markets like the U.K. and Japan.

“From that initial interaction, we then begin to see these newcomers start to interact and shop with us via our DTC channels too,” Lawrence said. “The omnichannel approach, including wholesale, is our best answer for how to expand in a profitable, brand accretive way.”

DTC and wholesale have different strengths, according to Siegel, with DTC theoretically offering first-party data, higher margins, greater control over the brand and greater connection to consumers, while wholesale ideally gives brands a partner with experience distributing products economically and efficiently.

“It became a battle,” Siegel said of how brands began approaching DTC and wholesale a few years ago. “It became a battle of players within the ecosystem — who could edge out their collaborator, as opposed to a holistic partnership where all sides could win.”

A case could be made that the battle is largely over now, with hybrid models being embraced across the industry and wholesale-brand relationships becoming more collaborative. But what does all this mean for future brands?

‘You should not aspire to be a DTC brand’

While most analysts agree that a hybrid model is the future, they also tend to agree that DTC will continue to be important for retail’s newest entrants. The channel is easy to set up and has lower initial costs, which makes it ideal for upstarts, but as the era of DTC brands fades, retail could also see more brands launching with partnerships already in place.

When Vanessa Hudgens relaunched her beauty brand Know Beauty, for example, she did so with Amazon. And beauty brand Pretty Smart entered the market through an exclusive deal with Walmart as well as its own website, even working with the mass merchant to develop its product line prior to launch.

“I think you'll see some of these brands may launch with very small strategic partnerships that give them their presence,” Katz said. “And if you can prove that the brand has staying power and pull, then you'll see continued investments in flagship real estate models.” 

That could range from pop-ups to permanent stores or limited geographic partnerships with retailers, Katz said, but regardless, there is likely to be a greater emphasis on how quickly a brand can grow its points of distribution. Some up-and-coming brands already offer prime examples of this: Actor Millie Bobby Brown launched her fashion brand at Nordstrom within months of its debut online.

While they took slightly longer to branch out, intimates brands Skims and Savage X Fenty have both also pursued wholesale relationships, including internationally, in addition to their DTC channels. Pursuing wholesale partnerships isn’t without its challenges, though, particularly for young brands.

“The problem with wholesale is you will go into a company and you will say to that company, ‘Look, I want you to stock our product’ and the first thing they will say is, ‘Our shelves are full,’” Saunders said. “So it's very difficult to break through. And then when you do break through, for a younger company, there are a lot of issues that you have to resolve. You have massive working capital requirements because if you're a brand-new brand and you're trying to get into a Walmart — even if Walmart agrees to take you into a fraction of the stores that they have — guess what? Your volume is terrific and most companies don't have the manufacturing capacity.”

The model of the future may look a lot more like that of running brands Hoka and On, which have both surged in popularity recently and have benefited from strong DTC sales and also a healthy presence in wholesale.

“You will get businesses that start off in both ways, but I think what is fortunate is … we've moved on from simply condemning a channel,” Siegel said. “There's no such thing as a bad channel. There are bad partnerships and there's bad execution.”

Another challenge for new brands, according to Saunders, is the simple fact that “there’s a lot of stuff out there” already. Any startups in retail now have to make it through a noisy landscape and offer a valuable enough proposition to gain shopper interest. Identifying as a “DTC brand” just doesn’t much matter anymore.

“We went through an era where companies identified themselves, and were known by others, by the outside world, based on where they sell, not what they sell. That's silly, right?” Siegel said. “Are you an apparel retailer? Are you a mattress retailer? Are you a connected fitness bike brand? Or are you a channel? … The idea of where you sell should always be a very important part of your business decision making. But it should not be who you are. You should not aspire to be a DTC brand. You should aspire to sell something special and figure out how to reach your consumer in the most economic, healthy, brand-appropriate way. I think, fortunately, we've moved a lot closer to that.”

Lord & Taylor’s new owners have barely embarked on a comeback plan for the nearly 200-year-old department store, but step one has already been accomplished: reinstating its iconic, sweeping cursive logo.

Saadia Group, which acquired the department store during a bankruptcy auction four years ago and ran it until early 2023, in 2022 had replaced the familiar, idiosyncratic logo with a Helvetica font. Saadia relinquished Lord & Taylor’s intellectual property, and that of other brands, after a New York County court in early 2024 found it was in default on more than $45 million in debt.

Sina Yenel, chief strategy officer at Regal Brands Global, which now runs Lord & Taylor, calls the disposal of the classic logo in 2022 “the biggest betrayal of the brand.”

“I understand going after young customers, but this is not a startup,” Yenel said, speaking by video conference. “This is a brand that’s been out here for 198 years. Lord & Taylor has such a huge profile, among different generations and different cultures.”

Along with the return of the historic logo, Regal Brands’ new 75-person Lord & Taylor retail team is working on a merchandising strategy based on elevated style, without being super-luxury, and eschewing fast fashion. Contrary to reports published elsewhere, it will not be an off-price business. While there are plans to use drop-shipping for fulfillment, the company won’t be a marketplace, either, according to Yenel.

“Lord & Taylor always brought the best stories, the best experiences to people,” Yenel said, adding that much of retail now lacks such “fun and entertainment” — and human connection.

Without stores, such intangibles will be more difficult to convey. But according to Yenel, tech updates will help revamp the retailer’s e-commerce site. To make high-touch interactions easier remotely, customer service will be based in the U.S. However, returning to brick and mortar is part of the plan, if only in the long run. Plus, because Lord & Taylor is employing a licensing model, brick-and-mortar opportunities like shop-in-shops and pop-ups could happen sooner, according to Yenel. 

It’s been a while since Lord & Taylor had any sort of physical presence — its Manhattan flagship was sold to WeWork and then Amazon following its bankruptcy filing — and its suburban mall stores have also disappeared. But Lord & Taylor’s IP has also been on quite a journey in the past few years. In 2019, fashion rental company Le Tote acquired Lord & Taylor for $75 million, just before the pandemic roiled the industry, and Saadia Group snapped up Le Tote about a year later for $12 million.

In 2024, Lord & Taylor’s IP — along with that of New York & Company, Lerners, RTW Retailwinds and Fashion to Figure — was part of the cache of assets forfeited by Saadia. In that process, various Lord & Taylor trademarks, domains and IP were later sold for $1.5 million to an entity called ADJHA LT, affiliated with Harry Adjmi, per court documents. ADJHA LT now holds at least some of those rights, per the U.S. trademark office. Adjmi is founder of apparel wholesale company One Step Up.

Regarding the venture with Regal, terms of the latest deal are undisclosed, according to family office firm Parkrise Capital, the investor behind Regal Brands Group. As of August, Regal is the sole owner of the Lord & Taylor trademark, according to a Parkrise spokesperson. The trademark registration has not yet been updated: Neither Regal nor its Lord & Taylor operation is affiliated with ADJHA LT or Adjmi.

This all makes Lord & Taylor both the oldest department store in America, and the newest, with Yenel working in the last six months on market research and assembling an experienced team. Vendors are being onboarded now and are enthusiastic; preparation for a “soft launch” that includes home, dresses and footwear has begun, Yenel said.

“There are good things about being small. We can make decisions in an instant and that gives us a lot of flexibility,” Yenel said. “Lord & Taylor should be about fashion that is going to last.”

Sam’s Club is seeing the highest growth rates from Gen Z and millennials, Walmart CFO John David Rainey said at a 2024 Bank of America London Investor Conference.

Over a two-year stack, Gen Z membership grew 63% and millennials grew 14%.

Part of the reason Gen Z in particular may be seeking out Sam’s Club is because, as a group, they are extremely cost-conscious, according to Hana Ben-Shabat, founder of Gen Z Planet. “Being the children of the Great Recession and the graduates of a global pandemic, they learned that financial security is vital,” she said via email.

Overall, the retailer said in May 2024 it saw its U.S. stores reach a “record” level of member numbers, resulting in membership income growth of over 13%. Sam’s Club has also reported 11 straight quarters of double-digit comparable sales growth and stated that its U.S. e-commerce channel is profitable.

The digital experience of the club store is resonating with this younger customer base, according to Rainey. Sam’s Club found that one in three of its members uses its Scan & Go technology on a regular basis, and the company has seen a 50% increase in its adoption over the past three years.

“I would argue that’s got to be one of the highest digital penetrations in an in-person experience that exists out there,” Rainey said. The tech, which debuted in 2016, allows shoppers to select items, pay and skip checkout lines. The retailer is also rolling out receipt verification tech that will be in all stores by the end of the year.

“We are not … deploying tech for tech’s sake,” Todd Garner, chief product officer at Sam’s Club, wrote in a company blog post in early 2024. “We’re constantly thinking about member pain points, and it’s all about focusing technology on Member needs and unlocking unparalleled convenience and connection.”

Those tech advances are specifically driving Gen Z interest, according to Ben-Shabat. “What truly differentiates Sam’s from other clubs is their seamless integration between online and offline,” she said. “Its in-store technology offers convenience and speed, and its overall in-store experience [are] all aspects that are extremely important to Gen Z ‘digital’ shoppers.”

The club retailer is increasing its brick-and-mortar presence, too, and expects to add 30 stores to its fleet in the next five years.

There are international opportunities as well, particularly in China, where Sam’s Club has two of its best-performing stores in the world. The club format “really resonates with the Chinese consumer,” Rainey said.  The retailer’s China member count grew 25% in the first quarter.

The company is also tapping into its membership in other ways — namely to help with testing. Sam’s Club recently announced a program that allows members to co-create products for its private label, Member’s Mark. Participants opt in to try products and give feedback on its owned label prior to their availability at stores so the retailer can better personalize items and enhance its member experience.

“Our approach goes way beyond traditional focus groups and surveys, with true engagement that will shape the future of retail by creating more personalized experiences for our members,” Megan Crozier, chief merchant for Sam’s Club, said in a statement at the time of the announcement. “We see the opportunity to include all members in the future.”

In 2022, warehouse clubs and supercenters delivered over $626 billion in revenue in the U.S., according to a recent Statista report. Last year, Sam’s Club’s total revenue was $84.3 billion.

When Vuori raised $400 million in 2021, it raised eyebrows. Then, founder and CEO Joe Kudla said the brand didn’t really need the money, but was using it to reward early investors.

Now, with a new $825 million investment from General Atlantic and Stripes that more than doubles its last raise and gives the brand a $5.5 billion valuation, Vuori still doesn’t need the money.

“This was also to provide liquidity opportunities for early investors as well,” Jon Kossow, a managing partner at Vuori’s first institutional investor, Norwest, said. “The business is operating profitably. It doesn't need funds for operating cash or for investment. And so this too was an opportunity for earlier stage investors — angels, high net worth folks — to get partial liquidity.”

Vuori declined an interview request with Kudla and did not respond to questions about what it plans to use its new funds for or what its future growth plans are. But Matt Powell, senior adviser with BCE Consulting, said raising money to reward investors isn’t that unusual for a later-stage company, since early investors likely want to cash their money out — and new, long-term growth investors want to get in.

Norwest is still Vuori’s largest institutional shareholder. The company calls its initial investment in Vuori a contrarian one, but even when Norwest invested $45 million in the brand in August 2019, Vuori was already touting its profitability. Kudla told Retail Dive a few years ago that Vuori has been profitable since 2017, just two years after its launch.

“It's truly remarkable that they've been profitable almost from the beginning because most companies just simply can't be — the startup costs are huge, the product development costs are huge,” Powell said. “Typically, brands lose money in the early years as they're building out, until they reach a tipping point and then turn profitable. So it's a real tribute to what they've done.” 

Kossow, who is an active board member at Vuori, confirmed that the brand is still profitable on both an EBITDA and net income basis.

“It's profitable the old fashioned way,” Kossow said. “There's no financial engineering here.”

That’s thanks to an emphasis on growing at a sustainable rate, with leadership approaching both international and domestic expansion methodically (Vuori has had a long-term plan since 2021 to open 100 stores by 2026) and keeping a tight hold on wholesale along the way. 

Being available in multiple channels “makes customer acquisition more economical,” Kossow said, but controlling wholesale orders is critical to more sustainable growth. “A lot of brands, the challenge and the pitfall they run into is growing at all costs — and that's usually through the wholesale channel. We've taken a very different approach. The wholesale channel always wants more and we kind of keep it in a measured growth fashion to protect the brand and sustainable growth focus.”

Vuori’s profitability and continued growth rates are a big part of what has drawn investors in, Kossow noted, saying the brand has been “pursued by a number of investors” since the 2021 deal with SoftBank thanks to its strong financials. Kossow could not provide specifics on Vuori’s performance, but said it’s seen consistent, high growth rates over the years.

“It's a self-sustaining company that hasn't needed capital to continue on the clip it's on, so I think that's attractive for folks as well,” Kossow said. “It's a big market. I think people can clearly look at brands like Lululemon and how big they’ve become and understand that there's no reason why Vuori can't be as big, if not bigger.”

The success of a multitude of brands in the activewear space — from Lululemon, Alo Yoga and Vuori to footwear companies like Hoka and On — points to a larger trend that has positioned performance-inspired apparel as fashion, according to Powell. The athleisure movement has been on the rise for years, but now even items like tennis skirts and running shoes are being treated as everyday wear, Powell said, which creates opportunities for ambitious brands to rise.

An Earnest Analytics report from 2024 pointed to the success of both Alo Yoga and Vuori in gaining share with shoppers, a trend that has also held true with teens.

“There's a tremendous amount of junk in this market and a tremendous amount of noise — brands that don't even know how to make activewear making activewear,” Powell said. “So I think there probably is a ceiling [for Vuori]. But I think Lulu was a good example of the fact that it turned out to be a multibillion dollar brand, even in what's a very, very crowded market.”

And much like Lululemon, which has expanded far beyond traditional activewear to offer products more akin to work pants and polo shirts, Kossow sees Vuori’s potential to bring the customer into a variety of new product categories. The loyalty that comes from one good product can lead shoppers to be more willing to try whatever Vuori comes out with next, like button-down dress shirts or new outerwear products, Kossow noted.

Vuori’s website already highlights a variety of activities, like running and tennis, as well as a “travel” category that features more everyday styles.

As to the future, Kossow wouldn’t say whether the company was considering an IPO, but noted that “exit opportunities present themselves” to brands that build a strong business.

“I would say the future looks quite good for them,” Powell said. “I'm never really good on valuations — they always seem too much money to me, but again, I think the future for the brand looks really bright.”

A few names come to mind when the phrase “DTC darling” is uttered — Warby Parker, Casper, Allbirds, Bonobos.

While they’ve all taken their own paths as they've evolved — from IPOs to mass store expansion — Bonobos' journey has included several ownership changes over the past decade.

About 10 years after launching, the men's apparel brand was scooped up by Walmart for $310 million in a move questioned by industry experts. The acquisition came amid a wave of similar deals made by Walmart to purchase digitally native brands such as ModCloth, Eloquii and Moosejaw.

However, as the mass merchant’s priorities around its e-commerce strategy shifted, it began offloading those brands, including Bonobos, which in 2023 was sold to Express Inc. and WHP Global for a fraction of what Walmart purchased it for.

Not even a year after that sale closed, though, Bonobos found itself in bankruptcy court as its parent company Express Inc. filed for Chapter 11.

With a new entity composed of three mall owners and a brand management firm purchasing both Express and Bonobos out of bankruptcy, what challenges remain ahead for the DTC brand?

Ownership changes

Bonobos was launched by Andy Dunn and Brian Spaly in 2007 and quickly became popular for menswear — particularly its pants.

The brand redesigned khakis, featuring a more tailored thigh for a better fit, a curved waistband and a medium rise style.

Bonobos was among the first class of DTC brands that helped change the way consumers shop for goods, with Dunn early on packing and shipping the brand’s pants directly to customers from his Union Square apartment in New York City.

The brand continued to expand, taking its products offline by opening stores, launching wholesale partnerships — including with Nordstrom — and attracting more funding from investors.

Bonobos eventually caught the attention of Walmart, which acquired the DTC brand in 2017. At the time of the acquisition, Bonobos said it was profitable and generating $150 million in annual sales. 

But onlookers questioned whether Walmart — a mass merchant focused on value and saving its customers money — and the higher-end Bonobos brand would make a good fit.

“I remember, as a Bonobos-aware and Bonobos-liking consumer, thinking, ‘This is the end. Walmart’s going to kill it. They’re going to really destroy the quality. They’re going to just change everything,’” said Peter Fader, professor of marketing at The Wharton School of the University of Pennsylvania. “And they didn’t.”

The deal, however, did fit within a strategy Walmart was employing of scooping up other digitally native brands.

And Bonobos’ Dunn remained involved following the deal, transitioning to a new role overseeing Walmart’s collection of digitally native brands, which at the time included shoe retailer Shoebuy, outdoor retailer Moosejaw and women’s apparel retailer ModCloth. 

But as Walmart’s e-commerce strategy shifted, it began selling off several of the brands it acquired — including Bonobos, which Walmart in April 2023 sold to apparel retailer Express and brand management firm WHP Global for a combined total of $75 million.

Coinciding with the closing of the deal, former Express Inc. CEO Tim Baxter in May 2023 said Bonobos had “delivered strong sales growth” over the past three years and generated $200 million in sales in 2022.

Baxter on earnings calls described Bonobos as a “very compelling addition to our brand portfolio” and said that the acquisition “represents a significant growth opportunity for [Express].”

And Bonobos did help boost Express for a time. In November 2023, the brand helped Express Inc. post a 5% year-over-year sales increase in Q3 to $454.1 million, by contributing $52.1 million in sales. The gains at Bonobos during the period were offset by declines at the company’s namesake brand and UpWest brand, which fell 7% to $402 million during the period. 

But Express Inc.’s challenges proved too great. The company faced declining in-store sales as well as “challenged vendor relationships and funded debt obligations,” leading it to file for Chapter 11 in April this year with a plan to close over 100 stores — though no Bonobos locations — and sell itself to a group which included WHP Global, Simon Property Group and Brookfield Properties.

About two months later, the newly formed entity (which also included mall landlord Centennial) dubbed Phoenix Retail received court approval to acquire Express Inc’s assets out of bankruptcy for $174 million.

Through the deal, Phoenix Retail agreed to operate all DTC commerce in the U.S. for both the Express and Bonobos brands. The company also said more than 450 stores would remain open, including 49 Bonobos Guideshops, down from the 60 the brand operated in September 2023. 

A future under Phoenix

As Bonobos settles into new ownership once again, it faces several challenges ahead — namely remaining relevant to new and existing customers.

To the brand’s benefit, Bonobos sports a loyal customer base, making the numerous ownership changes less impactful in a sense, according to Liza Amlani, principal and founder of Retail Strategy Group.

“It doesn't actually matter who owns the brand,” Amlani said. “There are so many die-hard fans — the chinos that they’ve been buying and the pants that they've been buying for years and years, no matter the ownership.”

For the most part, Bonobos’ previous owners have largely left the brand alone in that from the customer’s perspective, nothing has really changed, according to Fader and Amlani.

“Just going in and seeing the product in the last few years, there has been consistency in the quality, in the materials, in the fit, which tells me that they kept the ethos alive,” Amlani said.

Dunn has also been involved in Bonobos in some capacity for much of its existence. He served as CEO for the first 10 years after the brand’s founding, and following its acquisition by Walmart in 2017, he took on a new role overseeing the mass merchant’s digitally native brands, including Bonobos. While Dunn stepped down as Bonobos CEO in 2018 and left Walmart in 2020, he rejoined Bonobos in June 2023 as an adviser under WHP Global, a role WHP Global confirmed he still holds.

But it’s yet to be seen how deep his involvement as an adviser is.

“How much of it was kind of real and operational versus optics? It was never clear to me that Andy's heart and brain were in it as was the case when they were founded,” Fader said. “It just seemed like almost window dressing that, ‘Hey, Bonobos is going back to its roots.’ We don't really see any manifestation of it. … It's not to say that they've been mismanaged. It's not like anyone’s done anything horrible to it. But I do think there have been some opportunities that just didn't really turn into anything.”

On the other hand, having someone of prominence at the brand could ensure continuity as it eases into new ownership. “I think it's going to be great for the brand,” Amlani said, noting, however, that “it really depends on what the new ownership wants to do with the people in the brand.”

But that consistency might be negatively impacting Bonobos’ growth.

“They kind of lost their momentum,” Fader said. “They had their original founding story from Andy Dunn stitching up pants in his dorm at Stanford. That whole story is just ancient history now and they never really replaced it with anything.”

Other DTC brands, like Warby Parker and Harry’s have been able to “keep it fresh and interesting,” expanding into other product categories, while remaining true to their brand identity, he said.

“They've just lost a lot of their distinctiveness — not their fault — but they haven't really done much to maintain their mind share,” Fader said.

The menswear space is increasingly becoming more competitive, especially with digitally native brands. Rhone has been opening more stores and expanding into additional product categories to reach new customers, while Indochino has been steadily building out its physical presence.

Bonobos’ own brick-and-mortar footprint also represents a potential area for growth for the brand.

Bonobos, like many other digitally native brands, set out to take its products offline, opening its first physical store in 2011. Dubbed “Guideshops,” the locations allowed consumers to try on products, without actually carrying inventory. While customers couldn’t walk out of the store with merchandise, associates could help them place their orders to have their items shipped to them.

That concept has largely remained unchanged. What did change, however, was the brand’s store footprint goal.

Back in 2016, years prior to the pandemic upending and changing the retail landscape, Dunn said that the men’s apparel retailer was planning to open 100 stores by 2020. Bonobos’ current footprint is half of that. But with mall owners Simon, Brookfield and Centennial as its part-owners, there’s potential for brick-and-mortar growth.

“Having that access to physical space, allowing [the] brand to scale — that is where I think we could really see some interesting things coming out of the deal,” Amlani said. “What happens to physical retail, and will Simon and Brookfield give Bonobos access to premium retail spaces that are innovative, that are new?”

What’s important for the brand moving forward, though, is finding a way to connect with its customer base to give them a reason to keep coming back and broaden its appeal to attract new customers.

“Its narrative has just disappeared. They sell a quality product. I still admire some of the ways they go to market, but no one talks about them,” Fader said. “They're just kind of off the radar compared to the days when they were kind of a DTC darling.”

A year after Purple introduced a new line of premium mattresses, CEO Rob DeMartini gave an update on how the new strategy is going. For one thing, DeMartini said consumers have shown “a real resistance” to buying an expensive mattress online, rather than the cheaper models it became known for. The product transition, too, was more expensive than planned and the company cost itself at least 3 margin points on execution alone, according to DeMartini.

“We launched a brand repositioning in the middle of one of the worst category years ever seen. And even with that, on declining sales, we were able to gain about 1,500 mattress slots nationally,” DeMartini said during a presentation at ICR in 2024. “That encourages me because it says the retailer and our partners know they need innovation, even in tough years.”

The home category faced declining sales for most of last year, with the U.S. Commerce Department reporting home goods as a category was down 7.5% in November 2023 and nearly 12% in October 2023. Purple in Q3 2023 saw sales fall 2% due to soft consumer demand. DeMartini said profitability is on the horizon, though, and could be reached this year.

“I mean, in all fairness, this company was on the brink for the last couple of years,” DeMartini said, noting that Purple “misread COVID” and didn’t have a good structure for wholesale set up. “I think we’ve turned the corner, we’re going to get healthy and there are places this brand can go, but I don’t want to get ahead of myself here. We’ve got to start consistently taking share in the core business, in the core country, and then figure out how to grow from there.”

When it comes to wholesale opportunities, a possible challenge for Purple is Tempur Sealy’s acquisition of Mattress Firm, which puts a mattress supplier in charge of a major mattress retailer. Mattress Firm makes up about a third of Purple’s wholesale doors, DeMartini said, and the brand has a presence in nearly half of the retailer’s locations.

“They’re a good customer, they’re a tough customer — I don’t expect either of those two to change,” DeMartini said of Mattress Firm. “Will we win less jump balls in the future there? Maybe. But we’ve got a really differentiated product so to me that’s the key. This is not just another mattress, this is a gel-flex grid and you like it or dislike it, but it’s different.”

The company’s own physical retail strategy is facing obstacles as well. DeMartini called it the “toughest part” of the company’s model and said the retailer plans to slow down its store opening activity until it can make sure its store fleet is profitable.

“It’s a mixed bag. We’ve got a third of those that are problematic for one reason or another and we’re trying to put our finger on it because it’s the same co-tenancy, it’s the same quality of location and yet two-thirds of them are working and a third of them aren’t,” DeMartini said of the retailer’s stores. “They’re great brand beacons, but they’ve got to make some money.”

On one thing, though, Purple is returning to its roots. The company's marketing strategy, which DeMartini said in 2023 needed to mature, has moved the brand in the right direction but isn’t doing as much as the executive hoped. So, the company has returned to the egg drop ad, with plans to release a modernized version of the campaign.

“This brand was irreverent, it was edgy, it was fun — in a category that’s generally not thought of as all that much fun,” DeMartini said of the company’s old advertisements. “I don’t think you’ll see Goldilocks again, but you may see the egg drop.”