It is targeted directly at competing more effectively with Amazon. I don’t believe either company is worried about dilution of their respective brands.
What Walmart needs is to keep leveraging its existing strengths — logistics and supply chain, as well as immense amounts of capital — while invigorating its online retail division so that over the next 20 years, they can appeal and sell to their target demographics (which is what millenials will become) with the same stickiness that Amazon does.
Bonobos is popular among young male professionals that are relatively fashion-conscious. There are many workplaces in New York where the majority of new grads and millenials buy most of their wardrobe from Bonobos. The key — Bonobos is often the first place they look at. Andy Dunn has demonstrated he knows how to build a business that’s both sticky and appealing.
He’s joining an online retail division headed by Marc Lore, and a Walmart that is shifting gears to face the Amazon behemoth.
Purchasing Bonobos is part of their strategy of capturing audiences and market-share in the short-term, and of building a portfolio of brands that they can continue to expand for the long-term.
Bonobos (as well as other recent acquisitions), and Jet.com, which Walmart acquired August 2016, are brands that were born online and grew online. These acquisitions mean people like Marc Lore and Andy Dunn, well-versed in the art of courting a customer base through primarily-online channels, are now at Walmart. And I foresee this trend continuing as Walmart’s ship slowly but steadily steers towards the age of online retail.