Whole Paycheck: Amazon Widens 3-Year Lead In Apparel; Walmart Designs A Fashionable Future

In this week’s Whole Paycheck report, just days after reports surfaced that Amazon was upping its grocery game to try to chip away at Walmart’s 10x lead in food and beverage sales, the 60-year-old owner of 5,500 stores is making moves of its own to reclaim its stake in the clothing and apparel category.

Walmart Fights Back With Fashion

In a clear acknowledgment that it needed to do something drastic to jump-start its formerly dominant clothing and footwear business, Walmart announced on Monday (March 15) that it was bringing A-list celebrity fashion designer Brandon Maxwell on the team.

When not making red-carpet gowns for Lady Gaga or sewing up designer suits and dresses for Michelle Obama, the 36-year-old native Texan will now be overseeing two in-house private-label lines for Walmart, starting with a holiday season launch in late 2021, followed by seasonal lines starting in the spring of 2022.

“Our shared fashion values of accessibility and commitment to incredible design and quality make [Maxwell] an ideal partner for Walmart,” said Denise Incandela, Walmart’s executive vice president, apparel and private brands. “Bringing his distinctive design talent to our elevated brand collections of Free Assembly and Scoop allows Walmart to offer customers stylish, high-quality fashion at an extraordinary value.”

By the sounds of it, Maxwell is going to be deeply involved in the total design process and will oversee four seasonal collections of men’s, women’s and children’s clothing, as well as a line of accessories. In addition to design work, Maxwell will also advise on fabric selection, sourcing, production and marketing campaigns. A line of Brandon Maxwell face masks has already been posted to Walmart.com and will soon begin hitting shelves in stores.

“This partnership allows me to bring the experience and joy of fashion to countless people who live in small towns across the country. Everyone deserves to have access to well-designed clothing at an accessible price point,” Maxwell said, in reference to the fact that 90 percent of the U.S. population lives within 10 miles of one of Walmart’s 5,000 domestic stores. “Like many people across the country who live in a small town, Walmart was the destination for everything where I grew up in Texas, including clothing.”

The Apparel Wars Backstory

The Maxwell hiring occurred in the same week that Wells Fargo released a highly publicized report proclaiming that Amazon had overtaken Walmart to become the country’s No. 1 seller of shoes, clothes and apparel.

While this purported leadership change garnered widespread coverage, PYMNTS’ research showed that the much-touted event actually happened in 2018, and has seen Amazon widen its lead over Walmart in the domestic clothing category every single quarter since, finishing 2020 with an almost 2-to-1 margin; eg 15.7 percent vs 8.4 percent.

As the above chart shows, Amazon trailed Walmart by a similar ratio in 2014 before catching up in 2017, then pulling ahead in 2018 and finally just expanding its lead over the past two years.

In terms of the gross merchandise value of items sold,  PYMNTS’ data shows that Amazon ended the year at $70.5 billion in apparel sales versus $38 billion for Walmart in the category.

In dollar terms, PYMNTS’ data shows that Amazon ended the year at $70.5 billion in apparel sales versus $38 billion for Walmart in the category. In terms of online market share, clothing and apparel is Amazon’s second-most dominant category behind electronics, at 45 percent. Walmart’s share of eCommerce categories are not broken out.

New Solutions

Given that Amazon’s lead in apparel may not be as cutting-edge as many think, Walmart’s solutions to the problem are. In addition to its designer deal, the company has also been trying to boost its brand and image, especially with younger shoppers, via social media and streaming commerce.

In fact, just one week after Walmart hosted its second TikTok shopping event with the help of Nabela Noor, Gabby Morrison and their combined nine million followers, the trending video-sharing site put Walmart back in the spotlight once again.

“TikTokers Are Transforming These $15 Walmart Sneakers With Paint, and We Love the Results” exclaimed a PopSugar headline, linking to the original posting of the plain white leather shoes being transformed into a pair of pink, must-have customized kicks.

Of course, the apparel tussle comes right on the heels of last week’s revelation that Amazon was picking for a food fight of sorts, in a bid to close its lone lagging position in the food and beverage category via the expansion of its Amazon Fresh line of physical stores alongside its 500 existing Whole Foods locations.

Amazon Expands Telemed

Two years after launching a telemedicine pilot program for its employees in Washington State, the online retail and web services giant announced that it was making Amazon Care available to staff in all 50 states. The in-house telemed rollout is slated to begin this summer, with plans to make the service available to other employers later this year.

“Amazon Benefits has been the enterprise customer that we’ve been serving to date. Now, looking at other enterprises, understanding their needs, we think a lot of the needs are similar,” said Kristen Helton, director of Amazon Care, according to reports. Amazon Care provides the firm’s employees in Washington State with free telehealth consultations, or in-home visits from nurses for a fee.

“We have developed the ability to treat chronic conditions … you can see the same provider, have a care team, so that group of clinicians really gets to know you … and I would say that we’re also learning on the clinical side, we really need to give clinicians the tools to provide excellent care,” Helton said in an interview with CNBC.