Walmart’s fashion push is resonating with more six-figure households

Walmart, whose tagline is “Save money, live better,” is typically known for groceries, gadgets and household essentials. But the company is trying to be a more trend-focused fashion player as it looks to compete with national brands, Amazon and department stores. In addition to hiring Incandela — who once launched Saks Fifth Avenue’s website and assumed her current role in 2021 — Walmart brought on celebrity fashion designer Brandon Maxwell as the creative director of Scoop and Free Assembly in 2021. All the while, Walmart has built brands with higher prices, partnered with influencers like Athena Roberts and Lori & Leslie on Instagram videos, and set up shop at New York Fashion Week. It has also overhauled its store displays to group items like handbags and installed QR codes that link to additional colors and sizes on its website.

The strategy appears to be working, especially with higher-income households, executives shared. In November, Walmart revealed that its apparel business grew “over 5%” every month of its third quarter. “We see more and more customers choosing Walmart for their source of fashion,” incoming CEO John Furner said on a Nov. 20 earnings call. Over half (60%) of Walmart Fashion customers are women, and 40% belong to a $100K-plus household, per data shared at NRF. About a third (35%) are ages 25-44.

Today, Walmart Fashion is home to “six brands that are a billion dollars or bigger,” Incandela said. “We’re assertively taking market share, our total performance scores are improving dramatically, [and] we’re capturing new customers,” she added. “Our $100K-plus household income customers are increasing dramatically, because they’re looking at Walmart for the first time for fashion.”

Refining and revamping Walmart’s closet

About half of the U.S., or 145 million people, visit Walmart’s website and stores every week, Incandela said. When Incandela joined Walmart in 2017, the company was doing well with boosting traffic. But, she said, it wasn’t known for playing a credible role in fashion. It was important, she said, “to change perception of Walmart fashion” — beginning with a fresher assortment.

Elevating Walmart’s fashion offerings “started with the customer,” Incandela said. The company found that when a typical Walmart customer shopped in Walmart, 60% of her spending was at an opening price point of $15 average unit retail, or less. However, when that customer left Walmart and shopped elsewhere, 80% of her spending was on higher AUR items. “It show[ed] that we were not supporting our customers’ closet,” Incandela said. “We were covering the bottom of their closet.”

This was particularly true when it came to Walmart’s “growth” customer, Incandela said. That’s a shopper who is Gen Z or a millennial, lives in an urban area, and has more discretionary income. “While we were winning on price, price alone does not make value,” Incandela said. “We were not winning on quality, aesthetic and style, so that’s where we’ve been pursuing this opportunity.”

The store experience has also been important to refine, Incandela said. Today, Walmart has remodeled about 1,000 of its 4,000 stores to help fashion offerings “stand tall,” she shared. As part of this, Walmart created distinct areas for denim and handbags. It also eliminated some 10% of its racks to open up the space. “We wanted the product to be the hero,” Incandela said.

The brand equation

Walmart’s fashion expansion covers three avenues: national brands, opening-price-point brands and what it calls “elevated brands.” Its national brands include names like Reebok, Wrangler and Michael Kors. Its OPP brands include Terra Sky, No Boundaries and Weekend Academy. Its “elevated brands” — or ones with AURs from $15-$40 — are Scoop, Free Assembly and Avia.

Initially, Walmart received pushback for wanting to sell brands at higher prices, Incandela recalled. When Walmart first developed Scoop and Free Assembly, Incandela said, “Our store operators said, ‘No way. We will never be able to sell this.'” Now, she said, Free Assembly is in all Walmart stores. Scoop — a once-shuttered boutique brand that Walmart brought back in 2019 — is in half of Walmart stores. It’s all proof that consumers are willing to opt into higher-priced, trendy styles, Incandela said.

Incandela also described how Walmart changed the look of two brands — No Boundaries and Joyspun — to better service today’s shoppers. No Boundaries is a young-adult brand, but a few years ago, it was “packaging to a customer who was 55-plus,” Incandela said. “That was a $2 billion brand, but … we were missing the mark,” she said. In 2024, Walmart completely overhauled the brand, from its logo to its assortment, to resonate with Gen Z. Its most popular products include joggers, sweatshirts and wide-leg pants.

Meanwhile, Joyspun used to be called Secret Treasures, but as an intimates brand, it did not connect with the modern consumer. “We said, ‘It’s time to retire this. There’s no saving this name,'” Incandela said. Joyspun, the new iteration, replaced Secret Treasures in 2022. “This is one of those things where you have to have a lot of courage, right?” Incandela said. “Because you know it’s not right, it’s not modern, [and] it’s not going to enable you to win.”

Neil Saunders, managing director for GlobalData Retail, has been monitoring Walmart’s progression in apparel, footwear and luxury closely. The company wants to be a “destination for fashion, especially among younger consumers,” he told Modern Retail. But, Saunders said, “This has been quite a tall order as, traditionally, Walmart has been seen as rather frumpy and basic in apparel.”

However, Saunders said, Walmart has “moved the dial” in the last few years by launching new brands, improving product design and making store environments “more attractive through better merchandising.” “I’d say that Walmart is early on in this process, but it has a lot more confidence in fashion now than it has [had] in the past,” he added.

Walmart, too, knows it will take time to accomplish all of its fashion goals — but it’s also eager to keep going. “Frankly, we are just scratching the surface,” Incandela said. “There’s a lot more to come. But I feel like we have momentum, and I’m excited about it.”