Wal-Mart snags Shoes.com domain for $9M

Dive Brief:

Following its shut-down earlier this year, Canadian footwear retailer Shoes.com has been parceled out to Wal-Mart and DSW, Internet Retailer reports.
Wal-Mart paid $9 million for the Shoes.com web address, which re-directs to its new Shoebuy.com unit (which Wal-Mart acquired in January). Meanwhile, DSW acquired ShoeMe.ca — another Shoes.com website — which also redirects to its own e-commerce site, according to the report.
In January, Canadian e-commerce footwear retailer Shoes.com shuttered its operations, including its websites Shoes.com, OnlineShoes.com and ShoeME.ca, as well as its two brick-and-mortar stores in Vancouver and Toronto.

Dive Insight:

Wal-Mart is continuing to invest in apparel e-commerce in a series of moves that appear to be orchestrated by the retail giant’s new U.S. e-commerce chief, Jet founder Marc Lore.

Late last year, Wal-Mart acquired Boston-based online shoe retailer ShoeBuy from Barry Diller’s media and internet company InterActiveCorp for approximately $70 million. Since then, the company has also scooped up quirky women’s apparel e-commerce retailer ModCloth, and outdoor apparel retailer Moosejaw. Aside from the Shoes.com acquisition (which is mostly a play for customer acquisition through re-directing of Shoes.com’s visitors), Wal-Mart is most recently said to be ready to snag online menswear retailer Bonobos, which, of all the apparel acquisitions, is, like Shoebuy, well established and profitable.

Wal-Mart/Jet's interest in these e-commerce upstarts seems clear: They are appealing brands with customer bases distinct from Wal-Mart’s own. Wal-Mart has long been challenged by the constraints of staying true to its lower-income customer base, which hold it back from expanding its appeal. The Jet deal, as well as the more recent acquisitions, could help attract higher-income shoppers and push beyond the top of its addressable market.

“To move Wal-Mart upmarket is a Herculean task,” retail futurist Doug Stephens, author of the forthcoming book “Reengineering Retail: The Future of Selling in a Post-Digital World,” told Retail Dive last year in the wake of the Wal-Mart/Jet deal. “Any time they do, they risk losing their most loyal customers. They’ve wound themselves in a corner by virtue of just how strong their brand essence is in the market. When you say ‘Wal-Mart,’ it brings up such clear connotations. For some people it’s what they want, and for some they want nothing to do with it. Buying Jet.com is an attempt to break free from Wal-Mart’s customer base.”

Wal-Mart could be hoping to avoid such pitfalls by positioning Jet as an alternative that will appeal to a different customer bracket. Acquisitions like Modcloth and Shoebuy are the speediest and easiest way for Wal-Mart and Jet to reach their goals, according to Profitero VP of Strategy and Insights Keith Anderson.