This morning Walmart officially announced its plans to acquire, the e-commerce startup that made a splashy entrance last year and has since crossed a billion dollars in sales. The USD 3.3 billion deal is by far Walmart’s single biggest e-commerce acquisition—indicating that the retailer feels it’s necessary to shake things up significantly to improve its position in the increasingly competitive e-commerce landscape.


Even with the formal announcement of the deal, which Walmart aims to close by the end of the year, much is still to be determined about how Walmart actually plans to deploy Jet’s capabilities across its own business. In a few areas, Walmart’s gains are more clear:


  • For instance, the addition of incremental, but potentially powerful, new shoppers. According to Kantar Retail ShopperScape®, just 1.8% of all shoppers shop Jet. But just 5% of shoppers also shop Jet, and Jet’s shopper base is also more likely to be younger and to live in urban areas, which would broaden Walmart’s connections across shoppers.
  • New and valuable talent, particularly Jet’s co-founder and CEO, e-commerce guru Marc Lore. Lore previously founded the online retailer Quidsi, the parent company of and other CPG-oriented banners, and then sold it to Amazon in 2010. Indications are that Walmart wants to put Lore in a leadership position across its e-commerce operations—again pointing to the retailer’s desire to infuse excitement and a new direction into a business that seemingly has stalled.
  • E-commerce capabilities, especially on the back end—though how Walmart chooses to deploy them is less clear. For now, Walmart plans to keep its and Jet’s banners separate. But Jet’s attention to maximizing points of distribution at a localized level—using nearby retailers to see where Jet can get a shopper an item at the lowest cost—could align well with Walmart’s increased efforts to use its stores as distribution centers for online orders across general merchandise and grocery. Meanwhile, when it comes to the front end, shopper-facing experience, Walmart is a big fan of Jet’s “Smart Cart” algorithm, which calculates different basket prices based on the type and number of items in a shopper’s cart, their preferences for shipping speeds, and more. Understanding the cost-shifting technology is complex, and so far it’s unclear whether the learning curve is too steep for shoppers—not to mention the tool sounds a lot like the “pricing gimmicks” that Walmart has historically pledged to avoid.


But given the complexities in integrating another retailer—especially one with its own distinct operating model—into the world’s biggest, in many areas Jet’s longer-term impact on Walmart is less certain. For instance:


  • What will happen to Jet’s operations over time? While plans are for Jet and Walmart to continue to coexist, Walmart appears to have moved quickly to put Jet’s talent into broader leadership roles at Walmart. If and when Walmart integrates Jet into its fulfillment system—potentially allowing shoppers to buy at Jet and pick up in a Walmart store, for instance—will it make sense to keep them separate?
  • How will Walmart apply Jet’s approach to cost visibility? Along with integrating their operations, it will be crucial for the two retailers to address how their differing brand propositions translate to longer-term relationships with shoppers. As noted before, Jet’s Smart Cart is a complex approach to pricing. In many ways it’s hard to imagine how Walmart could fully integrate that system into its own site while maintaining its traditional pledges of EDLP and simplicity.
  • How will Jet help Walmart enhance excitement and experience online? On the tactical front, Jet’s model is solution- and basket-focused. A shift toward a category- and solution merchandising focus on could be especially valuable for Walmart as the retailer expands the footprint of online grocery pickup.  Meanwhile, as Walmart has worked to expand its online assortment, particularly through third-party sellers, the retailer has at times struggled to manage its marketplace and maintain its price and brand promises to shoppers. Jet’s careful vetting and management of its third-party sellers could provide valuable learnings.
  • Most significantly, how does this acquisition affect Walmart’s positioning versus competitors? It’s clear that Walmart feels a big move is necessary to keep up with the evolving e-commerce and broader retailer marketplace. The purchase of Jet and potential infusion of its unique capabilities certainly has the power to put the retailer ahead of the brick and mortar retailers that have lagged online—including Target. But when it comes to facing off against Amazon, the fight will continue to be tough. Amazon’s strategic focus is already beyond basic questions of marketplace seller management and fulfillment avenues and instead on forming longer-term, lifestyle-oriented relationships with shoppers through devices, media, and more. While much has to play out for this deal for Walmart, it is certain that the retailer still has work to do to offer shoppers a unique proposition that integrates the agility of digital with its scale and power in the store.


Many more questions still have to be answered, and our Walmart and digital teams will be keeping close tabs on the developments. Check back to KRiQ as this deal proceeds.


For a deeper dive on how to craft and align your broader digital strategy in this evolving marketplace, register for our e-Commerce and Digital Strategy Forum in New York on October 5-6. With that strategy in mind, to formulate your game plan to align with Walmart’s strategies going forward, join us in Bentonville on November 2-3 for our Walmart and Sam’s Club Workshop.  

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