Walmart Acquires Virtual Fitting Room Company Zeekit as It Makes Push Into Fashion

Source: Walmart
  • Walmart said it will acquire Zeekit, a virtual fitting room company.
  • Shoppers will be able to use the technology to try on clothing from Walmart's private labels or the national brands it carries and get opinions from friends.
  • The retailer has expanded its focus on fashion by launching private labels, hiring a high-end fashion designer and adding more apparel brands to its website through a deal with secondhand site ThredUp.

Walmart said Thursday it will acquire virtual fitting room start-up Zeekit as it makes a push into fashion and caters to customers shopping for clothes online.

Financial terms of the deal were not disclosed. The retailer declined an interview, citing the quiet period ahead of reporting its first-quarter earnings on Tuesday.

In a post on the company's website, Walmart U.S.' executive vice president of apparel and private brands, Denise Incandela, said customers will be able to use the feature to try on items from Walmart's private labels and the national brands it carries, such as Free People, Champion and Levi Strauss.

When the technology launches on Walmart's website, customers will be able to upload photos of themselves or choose from different models that represent their height, shape and skin tone. The technology will show how the clothing would fit and resemble the experience they have at a store. They can also enlist a friend's help in deciding on a purchase by sharing the virtual outfit and getting an opinion.

By acquiring the start-up, Walmart is hoping to improve the customer experience and make online shopping more social, Incandela said.

"Virtual try-on is a game-changer and solves what has historically been one of the most difficult things to replicate online — understanding fit and how an item will actually look on you," she said in the website post. "Zeekit will help us deliver an inclusive, immersive and personalized experience for our diverse customer base."

Walmart is the world's largest retailer, but it is better known for selling groceries, basic T-shirts and household items rather than fashion-forward apparel.

Over the years, however, it has sought to raise its profile by buying clothing companies with a following, including menswear retailer Bonobos, women's brand ModCloth and plus-sized brand Eloquii. It has launched its own private labels, including Sofia Jeans, developed with actress Sofia Vergara, and Free Assembly, a men's and women's clothing brand designed by the former chief creative officer at Bonobos. And it struck a deal with fashion resale site, ThredUp, to sell gently used fashion apparel and accessories — a way to carry more higher-end brands on Walmart's website, but at a wallet-friendly price.

With the expansion, it has taken aim at competitors like Amazon, the top seller of apparel in the U.S.

Amazon surpassed Walmart to take that title, and now accounts for about 11% to 12% of all apparel sold in the U.S. and 34% to 35% of all apparel sold online, according to an estimate by Wells Fargo in mid-March. Walmart is the country's second largest apparel seller, with an estimated $33.43 billion in total apparel and footwear sales in 2020 compared with Amazon's $41.15 billion, according to Wells Fargo.

It has also taken a page from Target, which has become known for building exclusive brands for fashion and other merchandise. After selling most of its private label clothing online, Walmart is adding more displays to hundreds of stores, including mannequins.

Walmart's apparel lines include a mix of brands — some made up of mostly low-priced basics, such as as Time and Tru and George, and four that it considers more upscale: Sofia Jeans, Scoop, Free Assembly and Eloquii Elements.

Walmart tapped fashion designer Brandon Maxwell — who has designed dresses for Michelle Obama and Lady Gaga — to oversee Scoop and Free Assembly.

Some of Walmart's efforts have flopped, however. It sold ModCloth just two years after acquiring the company. It launched an online "flagship store" with Lord & Taylor, the department store that later went into bankruptcy proceedings.

Zeekit is a female-founded start-up that's based in Tel Aviv, Israel. Its team and three founders CEO Yael Vizel, Chief Technology Officer Alon Kristal and Vice President of Research and Development Nir Appleboim will join Walmart as part of the deal.

Incandela said the company will also bring expertise in real-time image technologies, computer vision and artificial intelligence, which it can use for other parts of Walmart's fashion business.

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