Can a $1,699 Espresso Machine Help Walmart Challenge Amazon? -- WSJ

Dow Jones01-20 01:00

By Sarah Nassauer

An ochre velvet swivel chair for $238. A $1,699 De'Longhi espresso machine. A $79 lavender crockpot.

Walmart is leaning into trendier home goods that, in some cases, are more upscale. The country's largest retailer by revenue which touts a mantra of " every day low prices" is moving up the value chain and making its inexpensive items more stylish. It is part of its push to try to attract more high-income shoppers, improve margins and better compete with Amazon.com.

As of last fall, Amazon's share of the U.S. furniture and home-furnishings market hit 20%, more than double its 9% share in 2019, according to data from PYMNTS Intelligence, a payment-research firm. Walmart's share of the category fell to 7%, down from 9.3% over the same period.

Overall, Walmart sales are increasing, mostly thanks to its fast-growing grocery business. But margins on groceries are tight, and the company is looking for ways to keep growing beyond its core low- and middle-income shoppers. Executives say more high-income shoppers are buying furniture, kitchen appliances and linens at Walmart, but it wants to do more.

It is the latest battlefield for the nation's two biggest retailers. While Walmart's grocery dominance draws hundreds of billions in revenue, Amazon remains the e-commerce titan, capturing $2 of every $5 spent online. And Amazon is growing particularly fast in nongrocery goods, thanks to its speedy shipping and broad selection.

In 2026, Amazon could overtake Walmart as the country's biggest company by revenue. In the first nine months of last year, Walmart reported $522.5 billion in revenue; Amazon's was $503 billion.

Nearly a decade ago, Walmart identified home goods as an area for improvement. The company also saw that its selection was dowdy and uninspiring. The retailer has been taking a closer look at its offering -- revamping some, discontinuing others -- to be more strategic with its effort to "democratize style," the term executives use frequently to frame their goals.

Walmart's internal research shows that shoppers equate stylish designs with better quality, said Creighton Kiper, who runs the home category for Walmart in the U.S. So the retailer has been trying to improve its look.

If the item also feels like a deal, shoppers become loyal, he said. "You got to have a shower liner," he said, but shoppers need more if Walmart is to become "the number one consideration for Americans when it comes to turning a house or an apartment into a home."

Years ago, its home team was focused on improving the quality of its products and bringing in more well-known brands, say former executives. At the time, overall company sales had been more variable, and many brands felt Walmart was too down-market to house their goods.

Walmart focused on simple trendy items at accessible price points and zeroed in on candles as a way in. Candles were also more profitable than other home decor such as wall art, said Jeff Evans, a former Walmart executive who led the home category from 2017 to 2020.

A big get at the time was putting highly scented Yankee Candles on shelves for the first time in 2017. Sales started to rise.

By the end of 2020, Walmart embraced several new brand partnerships that helped push further into trendy designs. After years of wooing, coffee-maker brand Nespresso started selling through Walmart.

But Walmart had too much product in the lowest price range, while most shoppers bought in the midrange of quality and price, said a person familiar with the situation.

At that time, actress and talk show host Drew Barrymore was starting a new home-appliance business with Shae Hong, the founder of Made By Gather. They decided to pitch Walmart a new line of colorful air fryers and toasters called Beautiful.

"I went to Walmart because other people weren't," said Barrymore of some other celebrity partnerships.

When its products hit Walmart stores, they were a hit, Hong said. Its sage green air fryer sold out within the first 24 hours. Its stand mixers were a top seller last year, and the company believes that 15% of Beautiful brand shoppers are new to Walmart, he said.

This month, Beautiful is now expanding its offerings at Walmart, including a new line of outdoor furniture.

Walmart has since invested in the design of some of its own store brands, such as inexpensive Mainstay and midrange Better Homes and Gardens, challenging some of its partner brands such as Beautiful.

Not everything has worked out as well. A 2021 partnership with Gap to sell home goods from the apparel retailer ended recently after sales faltered.

More design-forward brands and products are coming, said Walmart's home-good chief Kiper. Home decor and furniture are current standouts, and it is gradually getting more premium brands to sell on its shelves, including De'Longhi espresso machines last year.

"If you are going to spend $8 on a towel it doesn't just need to be a black or a navy or a white towel," said Kiper. "We've realized that everybody wants a beautiful home."

Write to Sarah Nassauer at Sarah.Nassauer@wsj.com

 

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January 19, 2026 12:00 ET (17:00 GMT)

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