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Madison Reed Enters Walmart in Wholesale Push — How Will Both Benefit?
Madison Reed is introducing its products into Walmart stores and on Walmart.com as the hair color retailer seeks to reach new audiences. This is Madison Reed’s newest wholesale partnership with a retailer, though its products already appear in Ulta Beauty and Target as well as on Amazon.
Madison Reed is seeking to harness what it called “a year of explosive growth for the brand.” Working with Walmart will put Madison Reed’s products in front of 240 million customers each week at 10,500 stores and on websites in 19 countries. Madison Reed has its own brick-and-mortar business, with 87 Hair Color Bars, but the potential exposure through Walmart is far greater than what its current physical footprint can offer.
“As a true omnichannel brand, we are dedicated to meeting our guests where they are and the beauty in this model is we are everywhere they need us,” said Madison Reed Founder and CEO Amy Errett in a press release. “Walmart is a key partner in accomplishing this goal.”
Walmart has already rolled out Madison Reed products at more than 1,500 stores. The retail giant will carry 28 SKUs from the hair color brand.
The addition of Madison Reed products at Walmart stores could help it keep up with the beauty expansion ongoing at rival Target. Target, in addition to its store-in-store Ulta locations, added skincare brand Futurewise to its assortment in February 2023. This was part of a push to introduce “thousands” of trending beauty products to its shelves.
From Madison Reed’s perspective, getting products into potentially thousands of new stores could be a great way to boost its DTC business. For instance, while Warby Parker hasn’t found a partner as big as Walmart, the brand is planning to open 13 new outposts this year to help expand the physical side of its brand. Additionally, a BHDP study found that 68% of consumers will shop online after making a purchase from a retailer’s physical store.
The relationship between Madison Reed and Walmart could prove quite beneficial for both parties. What remains to be seen is if Madison Reed will seek further growth through wholesale and if Walmart will attract other big-name beauty retailers to further build out its offerings.
Discussion Questions
Do you expect Madison Reed to continue expanding further into wholesale? What opportunities does wholesale open up for DTC brands that they couldn’t achieve on their own?
Poll
Loading …BrainTrust
Carol Spieckerman
President, Spieckerman Retail
Brian Cluster
Director of Industry Strategy - CPG & Retail, Stibo Systems
Madison Reed has been actively expanding its direct-to-consumer business, which has worked well for it. However, to bolster reach further it needs to move more squarely into wholesale. The Walmart deal propels growth in the new channel and helps to expand awareness of Madison Reed and its products. Having a prestige brand like Madison Reed is also good for Walmart as it tries to bolster non-food spend and use more inspiring brands to attract and grow spending from more affluent consumers. Given that only a select number of products will be sold through Walmart, I don’t see this cannibalizing Madison Reed’s other channels.
Brand ubiquity is the new exclusivity and true scale is no longer achieved in a single channel. More brands and even retailers are revisiting the advantages of leveraging others’ physical and digital platforms. This marks a big shift in thinking. Wholesale and direct-to-consumer are no longer seen as being mutually exclusive, they are synergistic. For brands like Madison Reed, retailer partnerships aren’t an accidental business, they are a deliberate, next-stage diversification strategy.
Similar to most successful retail-brand deals, this one has the potential to provide clear benefits to both Walmart and Madison Reed. Walmart has an opportunity to add higher-end and digitally accomplished brands that can cater to the premium beauty customer who may be highly engaged digitally in the beauty category. It also may help add more loyalty within the beauty department of Walmart and prevent consumers from leaving to go elsewhere for their preferred hair color product. For Madison Reed, a deal to be in the 1,500 best-fit stores allows the brand to reach new consumers, extend its in-store reach into new geographies, and tell its brand story using all of Walmart’s omnichannel options.
For historically strong DTC brands, wholesale offers a much larger audience and an opportunity to introduce the brand to a new set of high-potential consumers. Obviously, the demographic match has to be there as well as a chance for both partners to benefit economically for it to be a long-term success.