Walmart (WMT) is going after arch-rival Amazon.com (AMZN) in a brand new way.
Its jet.com site will launch its own higher-end private brand of grocery and household items such a coffee, olive oil, laundry detergent, paper towels, and other items in the coming months, a move that should help it better compete with the popular Whole Foods 365 house brand of items. Amazon recently completely its acquisition of upscale grocery Whole Foods Market.
Jet.com, which Walmart bought last year for $3.3 billion, says the brand, called “Uniquely J” will cater to the needs of young urban adults, so-called “metro millennials,” a demographic Walmart doesn’t reach nearly as well as jet.com does. The web site is also expected to soon start selling more upscale brands like Bonobos and Modcloth, according to media reports. Walmart bought both those brands this year but doesn’t sell them on its walmart.com site.
When successful, store brands offer retailers high margins and more control over marketing and distribution. And when they are perceived to be as good as national brands, they are a boon. Costco Wholesale (COST) gets 20% of its U.S. sales, or roughly $15 billion a year, from its wildly popular Kirkland brand of everything from hand soap to hot dogs. Target (TGT) has also revamped some of its wellness products.
The moves also comes at a time Walmart itself is in full-on experimental mode to win a bigger share of grocery. It recently announced a test in Silicon Valley to have staff from the Deliv delivery service drop off groceries in the customer’s absence and even stock the items in a fridge.
A jet.com spokeswoman told Fortune that more items will be added. The Wall Street Journal earlier reported that jet.com would start with around 60 food and household products over the next two months, and later add baby, beauty, and pet products that are higher end than what Walmart’s store brands offer.