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Walmart Unveils its Black Friday Strategy

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Walmart has finally disclosed its strategy to wring as much value as it can from the all important Black Friday. The retail leviathan plans to hold two separate Black Friday events, at 6 p.m. and at 8 p.m., and to aggressively offer promotional sales for the duration of the weekend. In anticipation of increased sales, it will be restocking its inventory and pushing a “One-Hour Guarantee,” which assigns special discounts to highlighted items for a specified hour.

Historically, Walmart’s Black Friday focus has been on toys, home goods and electronics but it has announced plans to move more robustly into the apparel sector. Planning to add an additional $500 million in apparel sales over the next year, the retail leviathan will be pushing brands like Ben Hogan, Russell, And-1 and Avia. According to chief merchandising officer Duncan McNaughton, Wal-Mart intends to offer an assorted basket of products that will roughly include 50 percent basic apparel, 40 percent fashion and 10 percent new, exclusively carried brands.

And it looks like Walmart intends to take advantage of the success other retailers have had with casual chic clothing, combining everyday wear with performance gear. Last week, Andy Barron, speaking to  roomful of analysts, said that Wal-Mart intends on focusing much of its efforts on women’s activewear.

The move into apparel sales is part and parcel of Walmart’s ambitious growth projections for the next several years. Their eye-popping goal for 2016: $500 billion in sales, or about one-half of what JC Penney borrowed this year to shore up its capital reserves.

The capital spending for Wal-Mart in 2015 will be aggressive, with plans to drop $11.8 billion to $12.8 billion. In addition to apparel, the company will emphasize improved technology, e-commerce and omnichannel capabilities and small-store renovations.

Walmart could also create increased market leverage with its proven licensing strategies. The retailer has enjoyed considerable success with brands like Duck Dynasty and plans to push exclusive labels, sometimes backed by celebrity endorsement, without the trouble of long-term contractual commitments. According to Barron, Walmart intends to offer suppliers three-year contracts rather than the standard one-year variety. “Suppliers know they can get $300 million annually for three years when they give us better costs and access to better exclusive product,” he said.

Many industry analysts are expecting that Walmart’s Black Friday efforts this year to reflect its new emphasis on apparel as a future driver of growth. This should translate into its special promotions and product highlights to feature much more clothing, especially the variety that appeals to “millennial” shoppers, than has been the case in the past.

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