Walmart's latest strategy confirms the death of the American middle class as we know it

Business Insider | 8/11/2017 | Kate Taylor
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Walmart is getting into aspirational retail — and it says a lot about the American economy.

On Wednesday, Recode reported that the online cosmetics subscription service Birchbox had discussed a potential sale to Walmart.

Walmart - Retailers - Months - Men - Retailer

Walmart has purchased several trendy online retailers in recent months, including the high-end men's retailer Bonobos, the hip fashion brand ModCloth, and the outdoor gear retailer Moosejaw.

These brands' wares are a marked departure from the apparel typically sold by the retail giant.

Walmart - Reputation - Garb - Retailer - Quadrant

Walmart's reputation for selling inexpensive but unfashionable garb is so established that it was the sole retailer placed in the low-price, less-fashionable quadrant in a 2017 investor presentation by Ascena Retail, the parent company of Ann Taylor and Lane Bryant.

ModCloth's dresses cost $60 to $150, whereas Walmart's dresses are usually priced at $10 to $25. Similarly, Birchbox's best-sellers range between $20 and $30, according to the company's website, while most of Walmart's best-selling makeup costs less than $10.

Addition - Merchandise - Changes - Discount - Retailer

The addition of upscale merchandise demonstrates the changes that the discount retailer has been forced to grapple with as the number of potential middle-class customers drops.

Pew Research Center defines "middle class" in America as households with two-thirds to double the national median income. While that still includes roughly half of American households, it's a shrinking group — from 2000 to 2014, middle-class populations decreased in 203 of the 229 metropolitan areas reviewed in a Pew study.

Income - %

While the average household income for the wealthiest 20% of...
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