18 August 2016

BUSINESS - Jet.com Adds an Edge to Walmart's Online Presence

Walmart’s purchase of one-year-old startup Jet.com is an important acquisition for the company, which has consistently underperformed in the ecommerce market.

The purchase, for over $3 billion USD, gives Walmart access to Jet’s intentional focus on customer experience and their commitment to keeping the customer experience “delightful.”

As Jet’s director of research, Ben Babcock, told Forbes in an interview prior to the acquisition, “The customer experience … must be seamless, consistent, and delightful from end to end.”

Jet has invested significant time and energy into user testing, and staying connected to their customers.

For consumers who may be avoiding Walmart’s current ecommerce offerings because of existing preconceptions about the brand, this refined focus on customer experience may be enough to sway them away from ecommerce giant Amazon and towards something new and exciting.

According to eMarketer, Walmart’s 2016 projected ecommerce growth was only 9.4%, significantly below the projected US retail ecommerce average growth of 16%.

Acquiring Jet gives Walmart access not only to Jet’s customer experience but also to their infrastructure – their warehouses, staff, and shipping operations – but also the brands that Jet has been able to attract and their more youthful, urban profile.

Bringing Walmart and Jet together has the potential to help both businesses.

They’ve each struggled to compete with Amazon, and both have an interest in tackling the online retailer’s market supremacy. Jet has focused on gamified pricing and a fun user experience in their competition with Amazon, while Walmart has relied on their significant brick-and-mortar presence.

By combining forces, it may be possible for the two companies to make a dent in Amazon’s market share.

Despite the hopes for their combined strengths, both brands will remain distinct. Jet’s CEO and co-founder, Marc Lore, will take over Walmart.com in the US and will also continue running Jet.com.
Keeping the brands distinct is one way that both companies can continue to leverage their unique brands while benefiting from each other’s strengths in quieter ways.

Expanding both brands individually and moving more slowly to an integrated public profile will give customers time to adjust, and hopefully provide Walmart with a larger online footprint in the next year.

By Tiffany Sostar
Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

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