Why Did Walmart Buy Art.com? Because the Superstore Is on the Hunt for HENRYs
Walmart makes a play to attract the "High Income Not Rich Yet" consumer.
Mega retail corporation Walmart is venturing out into the art and home decor market with last week’s acquisition of Art.com. It’s a move that makes sense for Walmart, which is looking to expand its customer base to younger, more affluent shoppers—the kind of people who have discretionary income lying around to buy a painting to hang over their couch.
According to market researcher Pamela N. Danziger, Walmart is on the hunt for HENRYs, an abbreviation of “High Earners Not Rich Yet.” Making between $100,000 and $250,000 in household income, HENRYs are just 25 percent of the population, but punch above their weight when it comes to consumer spending, accounting for 40 percent of the country’s total, Danziger wrote in Forbes.
In 2015, a consulting firm identified the typical Walmart customer as a white, 50-year-old woman with an average household income of $50,000. By comparison, Danziger writes, Art.com likely attracts a much younger and more affluent demographic: Research by her consultancy company, Unity Marketing, finds that the average art and framing customer is under the age of 45 but makes more than $100,000.
Art.com is a 20-year-old company, and it averages $300 million a year in revenue, according to Walmart, which called it “the world’s largest online retailer in the art and wall décor category.” The new parent company will keep the original domain going, as well as cross-listing art.com products on its main site and the Walmart-owned Jet.com.
Of late, Walmart has been on a buying spree, with plans to grow to include as many as 40 online brands in order to better compete with Amazon—which, of course, has its own Amazon Art division where one can buy art at widely varying price points. Other Walmart acquisitions include the sites ModCloth and Shoes.com.
In its quest to become a “specialty retail destination for the home,” Walmart believes that creating a home that one loves “starts with the wall,” said Anthony Soohoo, the senior vice president for the home division of Walmart US eCommerce, in a statement. The hope is that customers’ purchases on Art.com can help Walmart “create even more personalized experiences,” because they will give the company a “better understanding of design aesthetics, color preferences, complementary pieces—like rugs, furniture, etc.”
And if Walmart can get the HENRYs to buy art, perhaps they will stick around on Walmart.com to purchase toiletries and other household supplies.
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