Exclusives used to be a major driver of retail traffic. It’s a tactic that isn’t used as much, but can still be used quite effectively.
Target, for example, has done a number of exclusive offerings with big brands. Its collaboration with Kate Spade and its partnership with Taylor Swift, for exclusive versions of some of her albums have been very effective.
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Nike might offer certain sneaker brands as an exclusive to its bigger retail partners like Dick’s Sporting Goods.
Target has also worked to build out the ultimate exclusives by having its own owned and operated brands. These are brand names created by the retailer that they manufacture themselves.
That allows for lower prices as there is no third-party to share the revenue with, and it means that the brand can never be pulled.
This isn’t Target offering glorified generics like Costco’s Kirkland originals brand. It’s the company trying to build out actual brands that are unique to it stores.
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It takes time to build equity in lines like this, but the retailer has had a lot of success. That gives it whole product lines that rivals like target and Amazon cannot sell.
Walmart has taken that further by buying a well-known brand and making the decision to stop selling it to other retailers. Instead, the popular electronics brand will become an exclusive product line for Walmart and Sam’s Club.
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Walmart keeps Vizio to itself
Walmart closed on the purchase of Vizio late last year. It did not make any quick changes to the brand or its partners.
“Vizio offers great products at great prices that customers love. They’ve always put customers at the center of their business – and that’s core to Walmart’s values and the omnichannel experiences we’re excited to roll out,” said Walmart Chief U.S. Growth Officer Seth Dallaire. “Viziohas also expertly changed their business over time, like building and quickly scaling a profitable advertising business. Pairing it with Walmart Connect will be impactful and allow us to invest in our business even further on behalf of our customers.”
Walmart spent $2.38 billion to acquire the company.
Vizio makes some of the best, most affordable TVs on the market, according to many reviewers. It also has a proprietary interface through which Walmart believes it an now introduce advertising.
The television brand, perhaps under a new name, will also become exclusive to Walmart and Sam’s Club.
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That means that once current orders have been exhausted Amazon, Target, Best Buy, and any other Vizio retailers will no longer have access to the brand.
“So, while Walmart moves Vizio into a private-label brand, Vizio’s Smartcast, which is already being integrated onto existing Walmart onn displays, will be the beating heart of the buyout’s success. Increased advertising and shoppable TV experiences, wherein consumers purchase goods straight from their displays, will be the real breadwinners for Walmart,” Tom’s Guide reported.
Advertising will be a Walmart driver
Buying Vizio and making it an exclusive Sam’s Club and Walmart offering is about growing the company advertising business. That’s something that has been a growing area for the brand.
“Our advertising business across markets increased 50%, including Vizoo. Walmart Connect in the US, which doesn’t include Vizio, grew 31%. Sam’s Club U.S. ad business was up 21%, and we saw 20% growth in our International markets, led by Flipkart,” Walmart CFO John David Rainey said during the chain’s first quarter-earnings call.
Walmart President John Furner was also bullish on advertising and Vizio during the call.
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“We had a good quarter with Walmart Connect, as you mentioned, up 31% year-on-year and also a strong quarter around the world and the other advertising businesses that we operate. We’re in the initial stages of integrating Vizio. I’m excited about the plans we have for VIZIO the rest of the year. It’s a great operating system, very frictionless, easy to sign up, and we’re looking forward to the contributions of the Vizio team going forward,” he added.
Walmart has 20 private label brands that generate more than $1 billion annually.
Great Job Daniel Kline & the Team @ TheStreet Source link for sharing this story.
