Monday October 14th, 2013 - 12:04PM
The shockwaves you felt earlier last month weren’t from Congress bringing government to a halt.
It was housewares industry reaction to the rollout of Cooking with Calphalon cookware, bakeware and kitchen tools at Walmart.
Indeed, the launch of anything that bears the Calphalon name on anything that bears the Walmart name might seem shocking at first.
But after the initial shock, don’t be so surprised.
Calphalon hasn’t been a channel-protected brand since Newell Rubbermaid thrust the Kitchen Essentials from Calphalon derivative into the mass market at Target nearly 15 years ago.
Despite that and other Calphalon spinoffs that have extended the brand’s reach in recent years, Calphalon’s landing at Walmart reverberates at a magnitude that could shatter what’s left of the traditional barriers of controlled distribution.
It will be interesting to track the in-store limits of the Calphalon brand and its pricing compared to a less-confined Walmart.com offering that tops out at what for the retailer is an otherworldly $349 for a 12-piece anodized cookware set.
Doubters will say that even $199 is too steep for cookware at a Walmart store. But is nearly $500 too steep for a vacuum cleaner at Walmart? Not if that vacuum cleaner is named Dyson.
A key barometer for Calphalon pricing at Walmart is pre-existing Calphalon pricing across the market, not just pre-conceptions about Walmart customer thresholds. Walmart is betting that for all core Walmart customers who can’t or are unwilling to step up to Cooking with Calphalon, there are plenty of customers and, better yet, untapped potential customers, who will buy a more affordable offshoot of the brand now that it is available there.
Calphalon understands the risks of taking its brand downmarket. Upscale department and specialty stores adjusted their Calphalon mixes when the brand opened Target, but they didn’t abandon Calphalon altogether. They might have to adjust again in the aftermath of the Walmart launch.
Can Calphalon’s cross-channel development and marketing dexterity sustain consumer and retailer demand for premium Calphalon product in upmarket channels? Calphalon might not be angling to sacrifice more shelf space at traditional customers, but Newell Rubbermaid is banking on long-term Calphalon gains from Walmart that more than subsidize any losses in upscale outlets.
Not to be lost in all of this is the growth of Amazon, its third-party marketplace and the overall democratization of digital commerce that has put every brand that once prided itself on controlled placement into unfettered mass distribution. Cross launching on Walmart.com, not a meaningful option over a decade ago, no doubt eases the Calphalon brand into Walmart’s domain.
It all makes the jump to Walmart by Calphalon hardly shocking.
Other premium brands are watching closely to size up their possibilities. Not every brand built on controlled retail placement, though, is ripe for this type of seismic distribution shift.
And as much as differentiation burdens suppliers, a burden also befalls retailers losing their grip on upmarket brands to cultivate new options, allowing them to blossom knowing the pull of the mass market is greater than ever.
Once you get over the initial shock, a move such as Calphalon’s debut at Walmart won’t bring everything else to a halt.