Fast Five Shorts | Don’t Change The Chanel, Walmart To Sell Luxury Goods Via Rebag
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Simbe, Ocampo Capital and Scratch Event DJs Chris Walton and Anne Mezzenga are joined by co-hosts from the Alvarez & Marsal Consumer & Retail Group, Kelly Carey and John Clear. In this clip, the group discusses: Walmart Selling Luxury Goods Via Rebag
For the full episode head here: https://youtu.be/s3yeI48E9A0
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Transcript
Walmart selling Chanel, Fendi and Prada.
Speaker A:And yes, you heard that right.
Speaker A:According to Yahoo Finance, Walmart is making a big push into the luxury market and has tapped resale platform Rebag to attract wealthier shoppers.
Speaker A:Starting January 16, the retail giant will offer over 27,000 pre owned high end items on its online marketplace including coveted pieces from brands like Chanel, Fendi, Prada and and Louis Vuitton.
Speaker A:The move follows the viral success of the work in a dupe made working ad Hermes Birkin bag and marks a significant step in Walmart's resale business.
Speaker A:Rebag's catalog will include luxury handbags, watches, jewelry and accessories ranging from smaller items to iconic pieces like the Birkin bag which can cost tens of thousands of dollars.
Speaker A:Additionally, there will be 100 items sold exclusively exclusively to Walmart customers, the company confirmed to Quartz in an email.
Speaker A:Kelly, on a scale of 1 to 10, how much do you like Walmart's partnership with Rebag and do you think customers will actually come to Walmart's website to purchase items from the likes of Chanel?
Speaker B:I'm really excited to hear what you guys score this as well.
Speaker B:I spent a long time on this.
Speaker B:I started in the middle and then I started to shift up.
Speaker B:So I'm going to give this an eight.
Speaker C:Okay, nice.
Speaker B:I'm gonna give it an eight.
Speaker B:I like it for a couple reasons.
Speaker B:I like it the most for Rebag but I'll, I'll talk about why I like it for each partner.
Speaker B:So you know Walmart over the last couple years has been really trying to grow their marketplace and increase their SKU count.
Speaker B:So from that regard I think this is a really smart move because they're immediately getting access to a ton more SKUs.
Speaker B:Whether or not someone's actually going to go think to buy a Chanel bag at Walmart.
Speaker B:If I'm Google searching for a Chanel bag now Walmart is getting visibility clicks from shoppers who would probably never go there for Chanel and maybe never go there ever.
Speaker B:So I think it is an interesting way for them to get access one to more SKUs and to potentially new consumers where they've already been starting to attract more of this know higher household income type of consumer.
Speaker B:Love this for Re bag because the luxury secondhand market has been growing a lot and I, I've actually been familiar with the company for a couple years through social media advertising which is a really expensive way to acquire customers and they're still not the biggest name in this market.
Speaker B:So they've been starting to dabble in partnerships.
Speaker B:They are also partnered with Bloomingdale's which I think is honestly not as good of a partnership as the Walmart one because you have people who would be going to Bloomingdale's to buy these bags full price and you know, they have an option to buy secondhand.
Speaker B:But I think this is a quirky but really interesting pair for them to also just get a lot of visibility to their brand and, and also reach a younger luxury consumer who will only buy secondhand.
Speaker B:A lot of the growth of this market has been driven by millennials, Gen Z, who through social media have a lot of visibility to these brands that they've never been able to participate in and now they're looking for ways to do that affordably.
Speaker B:So I think I also just love Walmart, like using the virality of the work in to now launch this totally new luxury platform I think is genius.
Speaker B:So great point.
Speaker D:I wonder how intentional that was.
Speaker D:It was seated.
Speaker D:Yeah, yeah, it could have been.
Speaker D:Yeah it could have been, could have been because I.
Speaker B:You can now no longer find a work in bag on their site.
Speaker B:That came right down.
Speaker B:Hermes has pretty good track record at, at lawsuits with anti copyright infringement.
Speaker B:So yeah, I'm excited to see where this goes.
Speaker B:Would, would love to hear your thoughts too.
Speaker A:Yeah, I mean Kelly, I think you bring up such a good point and we've said this the last couple weeks like this is a search game now and I think from people finding things on social media.
Speaker A:I'm bringing in Google Lens again because that's what I do all the time when I see a bag that I like and now, you know, Walmart's going to be the first one that shows up when I find that bag.
Speaker A:Whether it's through search, through typing in Fendi handbag.
Speaker A:Like this is now a consideration that many people would not have made before.
Speaker A:And I think Walmart's biggest issue right now, which again Kelly, I think you bring in the validity and authenticity that Rebag brings to this partnership because I think that's the biggest challenge that Walmart will have here is that yes, I see a fendi bag on Walmart.com 1.
Speaker A:This is weird because I didn't expect that it would be there, but now I have Rebag's name attached to it so that I know that actually this is going to be an authenticated bag.
Speaker A:This is the same thing.
Speaker A:It's just at a place where maybe I'd never considered, you know, shopping for this type of thing before.
Speaker A:So John, I'm going to Bring you in here too.
Speaker A:What are your thoughts on this?
Speaker A:Are you going to buy your wife a chanel bag on Walmart.com?
Speaker C:Well, hold on.
Speaker D:And what's your grade first?
Speaker D:I want to know.
Speaker D:One to ten.
Speaker D:Where are you?
Speaker D:Are you eight?
Speaker D:Kelly was eight.
Speaker D:What are you.
Speaker A:Oh, I'm, I'm a ten on this.
Speaker A:I think it's brilliant.
Speaker A:Yeah, yeah, I think it's total, total brilliant move.
Speaker A:John.
Speaker A:Where.
Speaker A:What are you grading and are you gonna buy your wife a bag?
Speaker A:Because I want to know this and.
Speaker C:Yeah, if she's lucky she'll get a handbag at some point.
Speaker C:I guess I don't have a great track record.
Speaker C:This does, this does make it easier for me to up my game there.
Speaker C:Yeah, I mean I would agree and say yeah, I think it's a 10 for me as well.
Speaker C:I mean I honestly from I think Kelly's perspective, kind of looking at, from everybody's view is a really good way and I don't see a downside for anybody.
Speaker C:I was a little bit more focused on my first view on the kind of Walmart piece of this and I literally don't see a downside to this for Walmart.
Speaker C:I mean, I mean people can say it's quirky, but they have I think like 150,000 sellers on their marketplace.
Speaker C:They sell a ton.
Speaker C:They compete directly with Amazon on this.
Speaker C:So why not get into this space?
Speaker C:So that's my first piece.
Speaker C:The other thing is Kelly touched on it.
Speaker C:I mean this, the resale market is massively driven by Gen Z, even particularly more so than millennials.
Speaker C:Gen Z, I think I looked it up.
Speaker C:43% have said they bought a secondhand item in the last 12 months and 83% say they are interested in buying a secondhand item.
Speaker C:So like the, the penetration of, of interest in this space is huge.
Speaker C:And the final piece I'd have is it.
Speaker C:It again goes on to this topic of Walmart doubling down on growth strategies.
Speaker C:And for me it's a growth strategy in two directions.
Speaker C:So one is trying to capture even more of that 100k plus household that we already know is is shopping more with Walmart and has been over the last 12 to 18 months.
Speaker C:So that's the first point.
Speaker C:The second point is now entering and attracting more attention from those, the aforementioned like Gen Z's.
Speaker C:Right, which is not a space where Walmart traditionally attracts a lot of customers and really kind of people age into Walmart I guess is the way to put it.
Speaker C:So if they can attract those earlier, obviously you get More sales over the life cycle of that person.
Speaker C:And I think it's, it's just very like it, it's low risk, it's high rewards and also it generates some clicks at this moment, right?
Speaker C:It's like, oh, Walmart are selling Fendy.
Speaker C:What?
Speaker C:Like it's very easy marketing play at this moment for kind of not a lot of downside.
Speaker C:And it's just, for me, it's just so interesting to see all the different ways that Walmart are innovating.
Speaker C:Like they're doing in like super like basic ways in grocery with private label, they're doing it in automation, they're doing it in high end luxury products.
Speaker C:I don't think anybody is touching as many pieces as they are at this moment, which is interesting.
Speaker A:I love that point, John.
Speaker A:And I think you hit on too, the importance here of they're not just doing this partnership with Rebag.
Speaker A:It's not just a design partnership and poof, it's gone.
Speaker A:It's all of the things that they're doing around it, working it to be present at New York Fashion Week.
Speaker A:Like they're really working to establish this audience and build this audience, you know, 365 days a year.
Speaker A:But Chris, I'll let you close it out, give us your grade and then explain why.
Speaker D:Yeah, or the Walmart rebrand overall that they just announced a couple weeks ago too.
Speaker D:Right.
Speaker D:And you know, I think the other point I make too, John, like before I get my grade is like, I think it potentially democratizes resale too because it potentially actually makes it available to all those older generations in a way that they were not able to, you know, view it or take part in it before too.
Speaker D:But I'm, I'm, I'm Spinal Tap on this one.
Speaker D:I'm dialed up to 11 on this.
Speaker D:I mean, I think.
Speaker D:And the reason I say that is because I did something yesterday that I never in my life thought I would be able to do.
Speaker D:I'm serious when I say that, like I typed Fendi into the search bar and I got 25 pages of results.
Speaker D:That's insane.
Speaker D:I never would have expected to do that.
Speaker D:And the, the only, and the, here's the cool thing about this.
Speaker D:To me, put my merchandising hat on.
Speaker D:The only Walmart customers that will have this experience are those that are searching for it, those that want it.
Speaker D:It's the perfect example of extending your reach digitally without alienating your customer base or your business model because you don't have to dedicate your space in the store to slow turning high priced items that could be too unaffordable for those people that can't afford them.
Speaker D:But this gives you that customer base.
Speaker D:So I think it's just a masterclass on digital retailing.
Speaker D:And try, I mean, here's the other thing.
Speaker D:And because I took a page from you on this one, try searching for Fendi at Target and let me know what you find.
Speaker D:My hunches, it's going to rhyme with a big fat donut that, that's what's there.
Speaker D:There's, there's nothing there.
Speaker D:And so Walmart's killing it on every angle.
Speaker D:And to John, to your point, the scale at which they're doing this too is just so impressive.
Speaker A:Yeah, it's coming from every department out of that retailer right now.
