Denise Incandela, EVP of Walmart Fashion: How Walmart Became a True Fashion Destination

Speaker A: Foreign.

Speaker B: Welcome to this flight of the Retail Pilot. I'm Ken Pilot, former CEO and current brand advisor, investor and board member. I'm thrilled to share with you some of the insights from retail's leaders and legends, as well as my perspective on retail today. This podcast is sponsored by the following. ROKT helps retailers make more of every transaction when someone is already buying online or in app uh, Rokt makes it possible to show relevant ads and offer content in that moment, like subscriptions, upgrades or loyalty perks. So instead of interruptive advertising, customers see something more useful and more timely. For retailers that creates more value from the transaction. For customers, it creates a better experience. That's Rokt making every transaction more valuable. On today's flight. The Retail Pilot I have my good friend Denise Nkandela, Executive Vice President of fashion at Walmart US. She's a seasoned retail executive with 20 plus years transforming luxury brands and mass retailers. At Walmart, she has added 1,000 plus national brands to the fashion assortment and developed elevated private labels including Scoop and Free assembly. She oversees six fashion brands exceeding 1 billion in revenue with with four of these brands over 2 billion in revenue. Previously, Denise served as interim CEO at Aerosols, President of Global Digital at Ralph Lauren, and spent 15 years at Saks Fifth Avenue where she built a $1 billion plus online business. She began her career at McKinsey Co. And holds an MBA from Wharton and a BS from Boston College. Denise, welcome back to the Retail Pilot.

Speaker A: Hi Ken, nice to see you.

Speaker B: It's great to see you. And before we get started on the main part of the podcast, I just got to give you some props on the award that you just received, the Sam Walton Entrepreneur of the Year award, which is one of the highest and most prestigious annual honors awarded to individuals and teams by Walmart. The award recognizes exceptional retail leadership, bold innovation and, and a strong entrepreneurial spirit. What a wow. Congratulations, Denise.

Speaker A: Thank you, Ken. You know, um, I am so honored and humbled to have received the award on Friday. Uh, it was an extraordinary surprise, but really this is a tribute and a recognition of the fashion team and our extraordinary transformation. And for the Walton family to recognize the team has everybody here just so excited and grateful. It is probably one of the first times a merchant has received this award and I, uh, received it in front of 12 to 15,000 of my colleagues and I was blown away then and I'm still blown away. And I know the team is as well, so appreciate you mentioning it, but it is the team that really deserves it. Was it a total surprise it was a total surprise. The night before they told me, uh, they flew my family in, which was so kind and so surprised me into Bentonville so they could be there, um, to watch and, um, celebrate with me. And I was blown away then on Friday, and I am blown away still today on Tuesday. And the team, as I said, it's really a tribute to the extraordinary talent and hard work of this team. And I feel really grateful to work beside them.

Speaker B: Well, huge congratulations to you and your team. And from what I read through public documents, the fashion apparel business is the fastest growing business inside of Walmart. Can you confirm that, Denise, for all of us?

Speaker A: Well, I can say that we have been called out in earnings calls over the last three earnings calls. And so, um, that has been exciting for, um, myself and the team. It's wonderful to be taking market share like we are. And it just is a confirmation that our strategy is working.

Speaker B: Congratulations again to you and the team. All right, let's jump into this. Walmart's apparel business has traditionally been about basics and value. When you look at the business today, what convinces you that Walmart is becoming a true fashion destination rather than just a place to add a tea to your basket?

Speaker A: Yeah, so I'll back up before I answer that question, which is one, you know, at Walmart, our purpose is to help people save money and live better. We do this in fashion by working to democratize fashion. Everyone should have access to beautiful clothes no matter what their budget. And we want to be our customers first choice for fashion and position fashion as the halo for all Walmart brand and stores. And we've got 145 million people that walk through our stores and e commerce website every week, which is mind blowing, almost half the country. And to be able to capitalize on that traffic and put credible fashion on top of that, uh, we believe is a huge opportunity in competitive moat. And so, you know, we've been focusing to create this credible fashion line by one, um, overhauling our assortment to cover more of our customer's closet, two, significantly enhancing our fashion shopping experience and then changing perception of Walmart fashion and broadening our customer reach. And so your question, what convinces us that we're making progress there, I will say is one, we're taking exceptional market share. And you started the call asking about our performance and our earnings calls. Um, you know, would confirm that our customers are responding to our store remodels with high NPS scores. Huge, uh, improvement over the last two years. We're capturing new customers and our 100k household income customer has increased dramatically as a penetration of our total customer base. And customers, influencers and media and equity analysts are all taking notice and giving us credit. So we feel really good about the progress in the strategy. But I would say the number one report, um, card marker that we're most keen on is market share. And that's where we're super pleased.

Speaker B: It's impressive when you take a look at all that's happening in fashion today and who you're competing with against, um, you know, from the fast fashion players of Shein to, you know, the majors that are out there, obviously Amazon's the biggest apparel bender or biggest apparel player in the space. Walmart is number two. But the apparel piece of your business has grown rapidly over the years and I know that you have focused on the fashion piece of the business. Let's talk a little bit more about that. Let's talk about some of the brands that you, the private brands that you've developed from Free assembly and Scoop and Avia, uh, along with the marketplace sellers that are bringing more and more products to the Walmart customers. Because 145 million people a week, that's a lot. But they also want a lot. So the question is, you've really spent a lot of time focusing on building brands inside of Walmart as well as finding product outside of Walmart through the marketplace, which is an exceptionally large part. Grow, a growing part of the business. Talk to us about, um, the brand building that you're doing and what you're learning.

Speaker A: Yeah. So, um, I would say, you know, we balance, um, three big components of our assortment. One is the private brand building, and that's a huge part of our strategy. Two is bringing in coveted national brands and making sure our customers have those coveted national brands that they want to buy. And then three is making sure that we, you know, have the long tail of the assortment that, so that we can be that destination and cover everything that our customers want. And we do that through Marketplace as well as bring real premium, whether it's, you know, a Rolex watch or an Hermes bag or even a Michael Kors bag. Like we can through our marketplace, bring an assortment that we otherwise couldn't. So those are the three big pillars and we support all of them equally. Meaning, like what our customer wants is what our intent is to deliver. And so the customer, um, she and he, um, determine our strategy. Uh, the private brand building has been about making sure that we can provide an assortment with exceptional quality and style. And I can talk about the design team that we've built here and how we've moved from basically, I would say a lot of items under labels, you know, really being a private label item business, to truly building private brands with a DNA reason for being target customer. And thinking about how we build these private brands from everything from as I said, who they are and what they're targeting, to what the assortment looks like, to what the creative looks like, to how it shows up in the stores, to how it shows up in marketing, the full 360. And that's been a huge focus area for us because if we want to be credible in fashion, we want to serve up private brands that um, are modern and cool and um, can do something in the market that we believe no one else can provide because of our scale and access to manufacturing and quality fabrication, um, due to our scale. And that's where I think we have really flexed over the last few years. And that private brand portfolio has includes really big brands, you know, billion dollar and up brands. We've got six of those and four of them are 2 billion and up. Um, that are both opening price point brands that we have completely modernized as well as elevated brands that we've introduced into our portfolio because we saw white space. Think average unit retails between $15 and $45 in the market that we thought we could cover in a unique way.

Speaker B: You know, we um, we've discussed this before but building private label is not easy. And then once, once traction happens, it's fun to chase it. But how do you balance the amount of private label or is there a balance that you seek between private label. Yeah, and, and national brands? And I would think that's really an important piece of your remit.

Speaker A: Yeah, you, uh, know it's interesting because um, our um, so one we let the customer choose, right. So that's really easy. We put it on the floor and then the customer, the productivity of the brand, whether it's national brand or a private brand really determines where the growth opportunity is. And the same thing for E Commerce. I think our private brands have surprised us in their growth. Um, we stood up of design team in New York about three to four years ago and these are real, I mean from the best brands in the country. These are extraordinary designers who believe in our mission to democratize fashion and bring extraordinary quality and style at price points that are ah, very hard to match in the market. And we want everyone to have access to beautiful clothes. And these designers are like really pumped about this opportunity to leverage Walmart's scale to bring fabrication and style and like cashmere sweaters and you know, silk and all these things at like mind blowing price points. And it just really amazing taste level. And so this team here, in conjunction with our Bentonville Merchants and PD team, which is also in Bentonville, are uh, bringing a quality of private brands that are kind of surprising us in their growth. And we have modernized about 15 private brands at this point and their wholesale modernization. And it includes everything from sunsetting a brand that we just think has gone past its expiration date, like Secret Treasures, Intimates brand, um, where we thought maybe not appropriate in 2025. Let's move on. And we um, stood up a new brand called Joy Spun and intimates instead $2 billion brand incred successful to like modernizing a brand like no Boundaries that has been around from 1990 but still has a great brand name and just needed a modernization to thinking about white space opportunities that we didn't have a brand like Free Assembly, Scoop, Weekend Academy, which is a tween brand. And so Free assembly and Scoop are elevated, um, women's and men's brands. And then Weekend Academy is that tween brand. So really going through our portfolio and relentlessly modernizing and elevating the assortment and so long winded, uh, response to your question, which is the private brands have really been a surprise because that exercise that I just walked you through has resulted in extraordinary success. And at the same time we're relentlessly going after the national brands. Think Reebok Chaps, uspa, Jessica Simpson celebrity, uh, Pink, uh, Steve Madden that our customers love and covet, um, because we want to provide it all.

Speaker B: And within some of those national brands, are you doing some design collaborations that are creating exclusive product for Walmart customers as well?

Speaker A: Yes. So we uh, just did with uh, Casey Musgrave's uh, collaboration called Casey Lee with Lee Jeans. And so in collaboration with her new album Middle of Nowhere, we um, have that lto limited time offer collab happening right now. Super fun. These collabs are a great way of bringing newness onto the floor. Bringing a, uh, younger, more uh, fashion customer onto the floor. They generate a tremendous amount of hype and excitement. Our influencers and creator audience love them. And um, we're in the middle of offering that right now. That just launched we had our Scoop Devil Wears Prada assortment, um, which was a tremendous success as well. Uh, we had Stranger Things, no Boundaries, which is our um, young adult brand. And so these collabs are becoming a bigger part of our strategy to both create excitement and engagement with our customer to Attract a new customer, and, um, just keep everybody excited about what's going on in fashion at Walmart.

Speaker B: The product's working. We know that you're taking it to stores in a different way. I believe about 1500 of your 4000 stores have already been remodeled and are considered fashion doors. Do you have the space for all this great product?

Speaker A: Well, you know, we're constantly thinking about how do we evolve our store experience. We have remodeled our store experience. We went through what we called, uh, Ken 1.0, where we took the whole front and we made the front more like, um, brand shops. And we highlighted all this premium product, whether it was our own elevated brands or whether it was national brands like Reebok and USPA and Jessica Simpson. And that had a huge impact on our sales. And now we're in the process of rolling out what we call 2.0, which is jewelry and accessories and intimates and footwear. And it's kind of really fun to see those categories show up in a much more elevated way. And as a result, um, you know, having different conversations with suppliers or brand partners because they want to be part of the action. And so we're constantly shifting the footprint on the pad so that we can make room for what's new and emerging. And I would say, you know, a big focus for us has been women's apparel. So. So women's apparel is continuing as a percent of the total to grow, um, as a very important category. But we are working to support all of the categories and learning as we go along. But it's been a lot of fun. And I would say that the store remodels are probably the number one consideration. Changing perception, changing, uh, move that we can make. So remodeling, almost half the change, uh, you know, of 4,000 doors that we have is having a big impact.

Speaker B: It's great to talk to someone that's excited about stores because there's so much energy around our digital world. You know, mostly the result of AI, but we often just don't talk enough about what's happening in stores, even though that's still, for most, 70% of their total volume. Of course, it's stores, and you've actually gone out of your store. You've done popups as well. You mentioned Devil Wears Prada. You did a pop up most recently, and you've done, uh, pop ups before. Talk to us about this strategy that you have of bringing fashion directly to where the customer is outside of the four walls of a Walmart store.

Speaker A: Yeah, well, you know, we're really working to shake up you know, shake up the perception of Walmart. And of course we don't have Walmart in New York City, um, which is the number one. New York and LA are the top two fashion markets in the country and we want to have a presence where the customer is. And so um, and we're trying to change consideration. We have this extraordinary product and if the product when it's in a different setting really kind of blows people's minds. And so this we've had now four pop ups. The most recent one in SoHo was like a tremendous success. It's so fun to see the product in an environment uh, like that with lines out the door of people work, you know, trying to get in. And you know I am blown away when you know we hear that a customer is asking how much is that? And the person is holding it up and saying 34 and then the customer is like 3400 and they're like no $34. You know like that's the kind of surprise that you get in these customers eyes because the product looks so good. And in that case um, we did do an LTO associated with this product which is the limited time only scoop and Devil Wears Prada which was a tremendous amount of fun assortment. And then uh, we introduced cashmere. For the first time in Walmart's history we offered cashmere sweaters which frankly we couldn't keep on the shelves and it was a huge success. And um, then also introduced silk for the first time.

Speaker B: Wait, wait, so what was the retail of the cashmere sweater?

Speaker A: 45 doll. So much fun. $45, $45 a Ah, long sleeve sweater. So soft, so gorgeous. Um, sold out like immediately. Like we were literally shipping them from stores to the pop up because we couldn't keep it in stock. Um, and then same with silk and you know, so it was just so much fun and we had beauty products in there as well and there was such energy and it's just our influencers came, our investors came, um, the media came and it like one big party for 10 days and it was just so much fun to see the love for Walmart and for our assortment as we go through this huge transformation. Um these are the kind of things that make us feel validated that we're on the right path. And you know this assortment does well of course in the store, you know, our regular stores too. But we're just trying to shake things up and change consideration and we're constantly working to do that because we can completely overhaul the Assortment, which we talked about, and completely overhaul the shopping experience, which is both stores and E Com. But if we don't change perception, um, the first two just don't get as much performance and hype as they should. And so doing all three at the same time is critically important to our success.

Speaker B: So Denise, now that you've won the Sam Walton Entrepreneur of the Year, maybe it's time. Maybe it's time. And now you have the approval from the company to take this store concept and instead of it being a pop up, can we open up some Walmart small footprint stores in major cities? I mean, what's holding you back from doing that? Is that a discussion? Can you share with us something along those lines?

Speaker A: I think that's a great idea, Ken.

Speaker B: And we'll, you know, I'm raising my hand. I want in.

Speaker A: Okay. I love it.

Speaker B: Because you'd have to think that for those 10 days and the lines and the people that went to the store, they want more. They want more Walmart in cities that they are in. And not everyone has the ability to hop in a car and head out to a Walmart near them. Clearly there's a big opportunity here.

Speaker A: Yeah. And you know, I'll say we did more. We do more in that pop up with three brands. We only had three of our elevated brands. 40% more in that pop up than we do on in an average super center, um, per day with 400 brands. We have 400 brands. Fashion brands in a supercenter. We have three brands in a pop up and we do 40% more on average per day. It's just. And then of course, you know, we bring in younger customers. Um, we bring in, you know, our average, average unit retail and our average order value is three times larger. So there's, there's lots of hype there. I think you've got a great idea, Ken, and I'm going to bring it back to discuss.

Speaker B: I am on this.

Speaker A: Of course, of course. I haven't thought of this at all.

Speaker B: So I appreciate it. Listen, you're, you're too busy, you know, building billion dollar brands. Who has time to think of these things?

Speaker A: I love it.

Speaker B: Listen, I will, we'll find a location in the Hamptons. We'll break one out there. I mean, Walmart in East Hampton, Come on.

Speaker A: I know, I know. It's amazing.

Speaker B: Disruptive. Let's take a quick break for a word from our sponsor, Leap, the retail as a service platform that lets modern brands launch and scale brick and mortar with far less cost, risk and complexity. I Know many of my listeners are thinking about or already in the process of opening retail locations, but the lease, build out and hiring feel impossible. Leap handles everything from site selection and real estate to design, build out, staffing and daily operations across 110 plus locations for over 55 brands in 13 US markets. Brands like Bombas, Faraday, Frankie's Bikinis and Ring Concierge have used Leap to run their retail. And with operational heavy lifting off their plate, they open faster, perform stronger and scale further. If you're ready to go physical, visit Leap Inc.com to schedule a call and explore what elite part partnership could look like for your brand. All right, speaking of disruptive, let's talk a little bit about technology and all this disruption around AI. Where are you seeing the impact of AI on um, what you are doing on what your team is building?

Speaker A: Yeah, I mean AI is probably the most exciting thing. It's hard because there's so much exciting things, but AI is probably the most exciting thing that's going on right now and it impacts our business in so many ways. So first let's talk about trends. It would take us weeks to get through the Runway and what's happening in social media and pulling together all the trends to um, help inform how, you know, what our assortment and collections will look like on the private brand side as well as the national brands, what we pick up. And now that can happen in hours with AI, if not minutes. And so, um, the trend forecasting, um, the uh, accuracy is extraordinary and the speed. And then the second is design work. So we can actually leverage um, AI to drive the design work and take a tremendous amount of time out of that process too. And then the third bucket of course is shifting from what would be a nine month cycle to, you know, significantly faster, less than a month. And all of that is being worked on on the producing private brand. Um, the first two were much further along. I mean we're using it right for trends and we're using it for design. And then you know, speeding up the whole cycle is something that we're working on right now. So uh, in terms of actually from concept to having it in the store, like that is completely changing. And you know, there's one word that defines all of it which is speed. Right. And accuracy. Right. Better accuracy. And then when you have the speed, you can respond to the customer much faster. So that's the private brand part of it. And then I would say the second part is making sure that we are getting the inventory in the right places in the right Sizes, um, you know, when you have 4,000 doors, you can imagine the complexity of getting inventory in the right doors and what inventory, how much inventory, what size, all of that. So AI is extraordinary in terms of that opportunity. And then the third is just in terms of productivity of the team. Um, more than half of our team are using IT AI every day to create their own reports and to work. We have proprietary systems within Walmart and it's changing everything that we do. And as a fashion team, I'm especially proud of how we have jumped on our own internal AI system so that we can be, uh, significantly more effective and efficient. And I will say that driving a transformation of this scale is really hard. I think it's gotta be one of the biggest, you know, transformation at scale in, in all time. And so to be able to deliver the exceptional performance and take the time to change everything we do and shake the tree on everything we do is a lot of work. And leveraging AI so that we can do it more efficiently is a big part of our success.

Speaker B: Typically, um, to bring product to market would take a brand almost a year, maybe a little bit more. Unless, of course, you were into tech slash Zara. Um, then it's, you know, 14 days or whatever crazy number that they report.

Speaker A: Yeah.

Speaker B: How have, how is you. You mentioned speed. You've condensed. How have you condensed this timeline? If you could give us some sense. Is it. You cut it in half yet? I mean, how much faster can you bring? Go from concept to delivery?

Speaker A: Yeah, I mean, we've taken months out of the cycle and there's still a lot more opportunity. I will say, um, you know, we are very different than fast fashion. We are, you know, we buy one. We're, we're huge, um, at scale. We have, uh, stores where we have to ensure that we have, um, in stock. And we're committing up front both basics and fashion and quality in style. Like we're, we're, we're making clothing to last for years and years and years. We're not making clothing, um, for one or two wears. And so, um, and we feel that responsibility to the environment and the earth. We take that responsibility very seriously. And so sustainability and regenerative practices are a big part of what we do. So we, we think of ourselves very different than fashion. We are very different than fashion fashion. But there's always opportunity to get faster within that, those guardrails and within that criteria. And that's where we've taken months out of our, um, process. But what I will say is quality is what we are more focused on. So if we have to commit to fabrics two years in advance because we know that because it's quality at an extraordinary price point, we'll do that. Right? And so that's where it's very different than fast fashion because this is about bringing the best exceptional quality at the most extraordinary price point. And so that's where we're very different than fast fashion because we're making sure that we're leveraging our scale to get these exceptional fabrications and materials at a, ah, price point that we don't believe

Speaker B: others can get access to from the consumer. On the consumer side online, the experience has changed quite a bit, um, in terms of how customers are seeing product, whether on your site or on the app. Talk to us a little bit about what you're doing with your virtual try on and how this is working because I recall you purchased a company, Zikit, a few years back. How important is that to the customer experience? And is there anything you can share with us around how it's impacted the rate of customer returns?

Speaker A: Yeah, so Zkit was really important to us. We bought it. Good memory, Ken. Um, I don't remember maybe four or five years ago, I think when I first took this role.

Speaker B: I remember when it was, it was just after I passed on that investment is when it happened. That's exactly whatever that was. It was.

Speaker A: Well, we scooped it up and you know, we still believe that, you know, people want to see of course, clothing on themselves. Hard to do online. We were one of the first to get in there. And we have approached it through two ways. One where we have, um, choose your model so you could choose somebody that looked like you and it was all different sizes, skin colors, et cetera. And that was, that has been exceptionally popular. And then the second is be your own model. Right. And, and so the big opportunity here is of course conversion because if I'm looking at something on myself, I am, um, you know, have a better sense of what it will look like. And so the conversion rates are significantly higher and then to your point, return rate too has gone down and frankly the return rate was more of a surprise and how effective that's been. Uh, but the return rate has gone down dramatically, uh, which is. So we are working to continue to scale, uh, the technology, both choose your model and be your own model and really pleased with that. We think it's shopping of the future online and you know, ultimately could make it its way into stores as well. So it's really exciting to think about the future of shopping. When you look at these technologies, that's

Speaker B: a, I mean it's always been, I guess been the holy grail to try to figure out a way to reduce that big return number which is generally wipes out most online retailers profits. So if you can figure out how to get the sizing right, get the look right and reduce returns, that's what a huge win.

Speaker A: Yeah. Yep, we agree.

Speaker B: Talk a little bit about your, your social media strategy and um, how you're helping customers discover more product. You have a creator driven social media strategy. What does that mean? And where would I be seeing that?

Speaker A: Yeah. So again there's three pillars to our strategy. The first is overhauling, improving our assortment, covering more of our closet. The second is, you know, improving our shopping experience both in store and online. And the third, which is what you're hitting on right now is changing perception and broadening our customer reach. And um, social media is such a crucial component of that. And that's where I get really excited to be doing this in 2026 Ken. Because you know, 20 years ago you and I would be talking about Vogue ads and billboards outside and you know, that would have been a lot slower in terms of changing perception in our stores. Um, but now we get to leverage this extraordinary community of uh, creators and social media influencers who um, we work with closely to showcase our assortment and our in store experience and our online experience. And they can, with thousands of them, we can leverage their credibility to change perception at a speed that we otherwise wouldn't be able to do. So frankly, um, as we've been like hitting these first two pillars really hard, the assortment transformation, the experience shop, the shopping experience transformation, we've also been equally hitting this change perception pillar and that includes you know, this probably the number one is the influencer and creator strategy and then these pop ups that we talked about. Um, but there's so much opportunity there and I'm very grateful to our influencers and that's you know, a big part of our pop ups is celebrating them. So we'll have a private party with them the night before. They're an important part of our strategy and they're helping us tell the story at a much faster pace with a credibility that um, we really appreciate.

Speaker B: Many of many of the retailers, many of the brands are working with shop my. Are you working with them?

Speaker A: Um, we kind of work with everyone. I don't know if we work with them. We've got an amazing marketing team who partner with us and make it all happen. But we are you know, we also have our own creator program which is growing leaps and bounds and um, has been a huge part of uh, the overall program as well.

Speaker B: How does one become a creator? How does one get involved in the creator program? Who do you call to apply?

Speaker A: We have a very big creator program and it's growing beyond our expectations frankly. And as I said, it's an important part of what we do. So um, you know, uh, I can't imagine doing this without it.

Speaker B: And in addition to that, you still do celebrity collaborations. That's still a very important part of what you do from Jessica Simpson on.

Speaker A: Um, yeah, yeah, we um, and we work with Brandon Maxwell, uh, who is a well known womenswear designer with scoop and free assembly. And um, you know, we're constantly seeking out partners who, you know, we think that our customers will get excited about as we drive this transformation.

Speaker B: So one of the things you touched on earlier I just want to come back to cause it's really been so much a part of the headlines we're reading around. Walmart is going after this customer with a household income of $100,000 plus. Yeah, where do you see you are now taking some of that business from? I don't know if you'll name names. I mean we know where customers shop today. But this is a big growth opportunity for Walmart obviously. And, and probably most important in your area as you're bringing fashion to that customer. I mean you, you mentioned earlier whether you rebag is now um, on your site and, and you can buy a Kelly bag. I did note that the Kelly bag I want is now only $27,499 and still available which I may have to go back to and buy right after this call. Um, but how, how much are you seeing this customer really coming into Walmart to participate in what's happening and how important are they?

Speaker A: Yeah, so our we, we are focused on two customer segments. We're focused on our core segment, um, which tends to be more budget constrained, Southern, rural, lower household income. We take our responsibility to that customer segment very seriously and we'll continue to provide those basic at extraordinary value that she and he depend on us for. And then in addition to that, what we found when we were doing the analysis that informed our strategy, ken, was that 80% of our Walmart customer spend was in higher average unit retails than we offered. So five years ago we learned that 80% of our Walmart customer spend was in higher average unit retails than we offered. That was a big aha. Right. So clearly I would, you know, the whole, the industry was fragmented, um, at when, let's say 20 years ago, is starting to consolidate. Department stores were losing favor from customers. Mid tier department stores, specialty mall, specialty stores were losing favor. There was all this market share for grab because the customer was shifting the spend. And there were three players that were customers, um, were shifting spend to. One was mass, one was off price, and one was digital only. Right. And so we saw an opportunity there to lean in. Hard to go after what I would call the growth customer. So there's that core customer I just spoke about, but then there's this growth customer that frankly didn't have as many places to shop because the industry was consolidating. And we said there's no reason that we can't go after that customer as well. And so that customer tends to be the growth customer. More urban, millennial, higher household income, 100k plus. And that's what was the, um, beginning of our strategy, which is this industry is shifting. This is a huge opportunity for us. We need to expand our assortment to cover more of her closet because we're not covering that part of our closet. And she's in the store. That's the 145 million people that are coming to our stores every week. But frankly, we were taking her hand and, um, walking her out the door to the competition because we were only serving the bottom of the closet with socks and underwear, denim and tees. And so that was the genesis of the strategy. Let's both cover the basics and cover this lifestyle fashion part of the closet that historically we have not supported well. And so with that came the 100k plus customer who's really important, um, in the industry and of course spends the most on fashion. And they were in the store, but we just weren't covering their closet needs. And so that's where we have been focused. And what she had told us five years ago, Ken, was the quality wasn't there, the style wasn't there. We weren't covering the part of the closet that, you know, she needed. And that's why we've been relentlessly focused on bringing in those coveted national brands, standing up this design team that's focused, relentlessly focused on quality and style. So to change that perception and make sure we're offering more of what she wants to buy. And it's been a tremendous success. And of course our growth has been driven from that hundred K, you know, plus household income customer. And you know, we are relentlessly making sure that we're supporting both now versus just the core. And it's driven our success. And so that has been like the, the genesis of our strategy and been pivotal to our success.

Speaker B: I mean, I would have to think that Macy's, Nordstrom, um, obviously Kohl's and other mass merchants would have to take notice that their, their customer who's been there for years, is now shopping. Not that they weren't before, but shopping and also being satisfied by the offer and the changes that are being made by you and your team at Walmart.

Speaker A: It's been a lot of fun. It's been a lot of fun because the. We wanted to move from like, you had to shop at Walmart to you wanted to shop at Walmart, right? It's, it's like, about desire. It's about wanting to. It's. And that's where these LTOs come into play. That's where all the, like, the remodels come into play. You know, delivering great product. Like, we want to be a desirable place to buy your fashion. And by the way, you're coming in and buying your grocery. Like Ken, um, I have, for my 20 years of being in luxury retail, it's always been about traffic, right? We always had the credible fashion, but we didn't have the traffic. And so I would say as a leader, you know, a big part of the obsession has been about traffic. Now we have the traffic. Like, we have a machine of traffic. And to put credible style and fashion on top of that machine of traffic has been so much fun. And it's really just about been about bringing the right talent into the organization that gets up, is hyped up about it, as, you know, as we are, um, and believes that, um, we can deliver this competitive moat, I mean, 4,000 doors and this traffic machine being one of the biggest grocers in the country, if not the biggest, with credible fashion on top of that is really, um, we think an advantage that is hard to touch, and that's what we're working toward.

Speaker B: Your energy is palpable. Let's turn it towards rapid fire and bring this flight in for a landing. Okay. First job in retail or fashion, what did it teach you that you still use today?

Speaker A: Yeah, uh, my first job. I grew up in New Jersey. My first job was Ann Taylor in the Short Hills Mall. And it really, it was the importance of serving the customer. I mean, I was, um, you know, of course, a salesperson and running around trying to make sure our customers were happy. And, um, that was the first time I learned how important it was on the service side how critical it was to get it right for the customer every single time.

Speaker B: When you're not thinking about Walmart or fashion, what are you most likely doing on a Sunday afternoon?

Speaker A: Yeah, maybe the same as you Ken, but I would say that, you know, friends and family on the beach this time of year is um, really my piece. And um, the way I center myself and I love the beach, I love the ocean. Ah, I think it's magic. And I feel very lucky that I get to um, spend that much time there. And I'm sure you feel the same.

Speaker B: Whose style, past or present, do you personally look to for inspiration?

Speaker A: You know, when you work in fashion, it's hard to find one person. I mean Mutia Prada or Stella or Katherine Holstein from Kate. You know, there's so many um, players out there and it's constantly changing, right? It's constantly changing. That's what I love about fashion. It could be one person or one brand and then two years later it can be another. And that's what makes our space so fun and exciting is the change, is the fact that it's constantly changing. So it's hard for me to pin down one person. But I'll say that, you know, those icons in the fashion industry are all inspiring to me in different ways and I admire and are, you know, have a lot of humility, um, like watching them do what they do, they're, they're extraordinary.

Speaker B: What's one daily habit or ritual that keeps you grounded when things get really intense?

Speaker A: I am spending a lot of time trying to walk and um, I let's, you know, we'll, we have a 350 acre campus in Bentonville. I spend most of my weeks there. At the end of the day I, you know, get my sneakers on, put a podcast on and um, just, or a book. And I try to get those 10,000 steps in. And I will say at the end of that, um, I really come out refreshed and feel good. So it's become, and on the weekends I walk with my girlfriends and then all the problems go away. Um, so I feel, I feel really passionate that walking uh, for me is really good for my head.

Speaker B: Final question. If you could give your 25 year old self one piece of career advice, knowing what you know now, what would it be?

Speaker A: Yeah, that one's easy. I would say when I first started out I thought I could just go it alone 16 hours a day, just like, you know, total hard work and I could make it all happen. And uh, of course that's not true. It's all about, you know, building your leadership, building a followership, building your peer relationships, building teams, like, you can't go it alone, like, no matter what you're doing. And so I wish that I knew that those lessons earlier, um, I would have been a lot more effective.

Speaker B: And with that, we'll end this flight of the Retail Pilot. Denise and Candela, thanks so much for taking the time to share your story and what's happening with Walmart with us today.

Speaker A: Ken, good to be with you. Always nice to see you and be a part of this program.

Speaker B: Thanks for tuning in to this week's flight of the Retail Pilot. And please give us review on your favorite podcast platform.