When Walmart and its subsidiary, Jet.com, unexpectedly bought the popular fashion brands ModCloth and Bonobos just a few months apart last year, the brands’ passionately devoted fans collectively gasped. Their beloved, quirky online shops—whose carefully cultivated aesthetics were more cool boutique than big-box store—had been gobbled up by a middle-American discount department-store chain with a reputation for exploitative labor practices.
It seemed a backlash was inevitable, as people vowed to shop elsewhere. “I shed a little tear when I deleted the app,” one woman told the Los Angeles Times after the ModCloth news broke in March. On Facebook, Bonobos’s customers trolled the brand mercilessly after the deal was announced in June.
A year later though, both brands are going strong. Any backlash that did materialize appears to be outweighed by customers—both new and returning—buying up even more of ModCloth’s colorful dresses and Bonobos’s shapely pants, at least according to the brands themselves.
“Business has been awesome,” says Andy Dunn, founder and CEO of Bonobos. “We’re seeing [it] in the numbers. The business is growing in double digits every which way: overall, new customer growth, repeat customer growth.”
Antonio Nieves, who joined ModCloth as CEO in March, is similarly positive when he talks about how things have gone since the acquisition. The shoppers who were with the brand before the deal, he says, are continuing to shop at ModCloth, and they’re buying more clothes than before and spending more per piece.
“What’s most exciting for us is the fact that we’re lifting up the order values not just for new customers, but more importantly, for those repeat customers,” he explains. The total price of the average order on the site, he says, is the highest it’s ever been.
Still, there have been changes, for the brands themselves and the people who have long shopped from them.
Culture and quality
The reactions to the ModCloth and Bonobos deals showed that fans of the brands felt there was a deep cultural divide between themselves and Walmart. Both brands had built their customer bases by doing things differently than others in the market. ModCloth thrived by dressing women of all sizes in funky, retro-ish dresses. Bonobos flourished by making a better-fitting pair of men’s pants, and then bringing that same approach to other items. In the greater retail landscape, they were indie labels, and they succeeded by staying committed to their customers and their needs.
Walmart, on the other hand, has practically become a symbol of heartless corporatism. ModCloth and Bonobos shoppers were put off by the stories of its notorious business practices. And some feared the brands would change: that their quality would decline as they cut corners to maximize profits, and that they would lose their personalities as they stretched to reach the broadest possible audience.
In some cases, there were classist undertones to the comments that followed the acquisitions. ”How are you adjusting the fit options for the standard Wal-Mart customer?” one person asked in reply to a video Bonobos posted on Facebook.
The association with Walmart was enough on its own to get some people to stop shopping. “I don’t begrudge a company for selling itself, but there’s something particularly egregious about the Walmart deal,” a former Bonobos customer told the Washington Post recently (paywall). “I don’t like the way they treat their employees or how they’ve put smaller retailers out of business. It’s not a company I want to support.”
Others watched anxiously to see if the brands would gradually lose what made them distinctive. Kira Bindrim has been a ModCloth customer for nearly five years (and happens to be Quartz’s managing editor). She worried the designs would become more basic, that quality would decline, and that the brand would reduce the extended range of sizes it offers. So far, she says, she hasn’t noticed many changes. Some of the same cuts and dresses that the brand has offered for years are still there, and prices haven’t noticeably moved.
Both CEOs emphasized that there have been no changes in quality, whether it’s the fabrics they buy or where they’re producing their clothes. ”Particularly important to us is that we didn’t change one iota of how we approach,” Dunn says. “Not a button, not a zipper, not a single penny of costing savings that we’ve been looking for anywhere as a function of the deal beyond just normal commerce.”
ModCloth and Bonobos would not reveal sales numbers, but both say they’ve seen sales and traffic to their sites increase overall since Walmart bought them, suggesting the complaints voiced online come from a vocal minority. Nieves admits that ModCloth did see a slight drop initially, but he attributes it to the company pulling back on marketing while it refocused the brand. But since they resumed their marketing push, traffic is growing again, he says.
Data from ComScore, a third-party analytics firm, isn’t strongly conclusive. A year-over-year comparison of traffic to Bonobos.com in April 2017, which saw a traffic spike, versus April 2018 shows an approximately 12% drop. But then a comparison of May 2017—the month just before the acquisition—to May 2018 shows traffic up 57% this year.
The monthly fluctuations in ModCloth’s traffic tell a similarly inconclusive story. March and April of this year saw traffic fall slightly versus last year, but traffic in May of this year was about 22% higher than the same month last year.
Either way, the numbers show that customers haven’t fled in droves. Most of ModCloth’s and Bonobos’s old shoppers appear to still be there.
The ModCloth community
One of the keys to ModCloth’s success has been its embrace of women of all sizes, which has helped it to build a strong, engaged community around the brand. Bindrim says she had always appreciated photos on the site showing off the clothes on plus-size models. “So the way I search—I imagine most plus-size people do—is by first filtering by clothes available in my size,” she explains. “Generally when you do that, everything you get has at least one plus-size model in the mix of photos, so you can be like ‘ok this is roughly how this might look on me.'” But from what she’s observed, there are fewer shots of the clothes on plus models since Walmart’s acquisition.
Nieves emphasizes that the brand’s values haven’t changed, and that ModCloth continues to increase the clothing options in extended sizes, not just from its private label but from the other labels it sells too. “For us, we’ve made it a conscious effort to make sure that we’re featuring not just women of all different sizes but also all different types of backgrounds,” he says, adding that the brand will soon launch a campaign centered on that idea.
Modcloth has recently added plus-size terminology back into its site navigation too, after doing away with it in 2015 to emphasize that women in those sizes were not a separate category of shopper. Nieves says customers embrace the term, and adding it back in makes it easier for them to find their sizes.
But it’s not just the professional photos that convey size-inclusiveness. Bindrim pointed out that the photos submitted by the regular people who’ve already purchased the item are also immensely helpful. To keep those customer images coming, ModCloth must maintain its community, which Bindrim worries ModCloth could still lose organically over time.
It’s not easy to measure community sentiment around a brand, but Tribe Dynamics offers some insight. The firm, which has worked for companies such as the luxury powerhouse LVMH, identifies and tracks influencers leading conversations around brands online, whether or not they have a large following. The number of influencers Tribe tracks who were talking about ModCloth went up and down a bit after Walmart bought it, the firm says, but since the third quarter last year, there has been “a steady decrease” in this group.
But even if there are fewer influencers talking about ModCloth, what they’re saying is carrying more sway, according to Tribe’s analysis. Using a measure it calls “earned media value” that translates word-of-mouth publicity into a dollar value, Tribe says that Modcloth’s influence actually up this quarter, compared to the same time last year.
One foot in the past, one in the future
Whatever customers feel, there are some benefits to being part of a company Walmart’s size. Both Nieves and Dunn point to the way Walmart has helped their companies with IT infrastructure, improving critical functions such as site load times.
The brands are also dipping into Walmart’s deep pockets to build out their physical footprints. ModCloth recently announced five new “Fitshops,” as it calls them—physical stores that don’t carry inventory but allow customers to try clothes on and get styling advice. Dunn says Bonobos has increased its stores—Bonobos calls them “Guideshops”—that focus on giving shoppers one-on-one service to find the right fit. It had 38 at the time of the deal, and 51 today.
Both brands also boast flashy marketing campaigns that they may not have had the resources for in the past. ModCloth launched a new influencer campaign with celebrities such as the rapper Lizzo and the country singer Cam, while Bonobos has started experimenting with television advertising. Before Walmart, Dunn says, “we might not have been so bold as to say, ‘Let’s go run a TV campaign.’ We’re in a place now where we feel like, ok, we can go take some more risks and make some more aggressive investments.”
All of these efforts are likely to attract new customers to the brands, ensuring that they keep growing. Of course they also have to stay true to the things that made them the businesses they are—the businesses Walmart wanted to buy. The brands are both in a position to expand in ways they couldn’t before, but scaling up while maintaining an indie sensibility isn’t easy. At least for now, ModCloth’s and Bonobos’s customers seem ready to come along for the ride.