Walmart buys a shiny new Jet(.com)

Walmart buys a shiny new Jet(.com). And, at $3.3 billion, it’s an expensive Jet to boot – the largest e-commerce acquisition in the market to date. It’s been interesting watching the reaction to this acquisition and what everyone has to say about it. It may seem obvious – to compete against Amazon – but here’s a lot of why Walmart pulled the trigger on this deal.

Firstly, who is Jet.com? Jet.com launched in July of 2015 and is billed as a Costco meets Amazon type company. It has an incredibly strong e-commerce pedigree and is the brainchild of Marc Lore who sold Diapers.com to Amazon back in 2010 for $545 million. According to CNN Money – “Jet has effectively worked to differentiate itself through bulk buying. Customers are encouraged to add various tagged items to their shopping carts, which can be shipped more cheaply in the same box from a nearby vendor. Those savings are then passed on to the customer.”

Walmart says… “We believe the acquisition of Jet accelerates our progress across [our] priorities. Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.” – Doug McMillon, President & CEO of Walmart

Forbes says… “No one knows how this will all play out. And no one knows for sure as to the specifics behind the deal, other than Walmart saw a great opportunity and made the move. But I cannot help but think that Jet.com’s stellar customer experience played a role. How could it not? Any brand worth its weight fully realizes the magnitude of providing the best possible experience each time, every time.”

Bloomberg says… “Lore is one of the smartest people in e-commerce who will bring a new kind of thinking to Walmart to help it transition to digital commerce” (Sucharita Mulpuru, an analyst at Forrester Research Inc.). “Walmart still struggles with things like third party marketplaces, which Marc and his team have successfully built.”

Recode says… “The deal is in many ways a marriage of necessity, but a shot worth taking as Walmart’s $14 billion in annual e-commerce sales is a fraction of Amazon’s $99 billion and is growing slower than the industry average. Its growth rate has decelerated for five consecutive quarters.”

Michael Chase, CMO
St. Joseph Communications

#MondayMashup > http://stjoseph.com/monday-morning-mashup-august-22nd/

#MMM #Walmart #Amazon #MarcLore #Jet

Posted on August 22, 2016 in Marketing, Technology, Trends

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#CMO of @stjoseph Communications. A true hybrid – part futurist, part technologist, part data monkey, part creative director, part CEO (because you have to still think of the P&L and the EBITDA) and through and through an innovator.

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