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The New York Business Journal reports that in the wake of Walmart's closing on its deal to acquire Jet for $3.3 billion, a move that it hopes will allow it to compete more effectively with Amazon, CEO Doug McMillon has written a blog post explaining why the purchase was made. The rationale was explained in five bullet points:

"1) Jet.com brings more ways to serve our customers and reach new customers online. Jet.com created a unique, transparent way for customers to shop, helping them make choices that lower their prices as they shop — from building smarter baskets to opting out of free returns and using debit cards. This has helped Jet.com win fans among savvy shoppers and will help us put the power to save in more shoppers’ hands. Look for that on Walmart.com.

"2) The deal will build on our e-commerce foundation and accelerate growth. We’ve grown Walmart.com to the second largest online retailer by traffic in the U.S. and in just the past six months we’ve expanded from 7 million items to more than 15 million on the site. We’re adding about a million more each month. We’ve built an impressive fulfillment network that uses mega-sized fulfillment centers and our stores to get orders to customers faster. Within a year, we’ve created one of the largest online grocery businesses in the country.

"3) Jet.com’s and Walmart.com’s customer bases are complementary. Jet.com is a hit among urban millennials, and it will continue to focus on delivering premium brands and experiences. Walmart.com is winning value-conscious shoppers with everyday low prices by keeping costs low. And that’s enhanced by a wide assortment and convenient store pickup options. Together, both Jet.com and Walmart.com will be able to leverage each other’s assets to grow the ways we serve customers.

"4) Jet.com boasts incredible talent. Marc (Lore, Jet's founder) is both a visionary e-commerce leader and a merchant. He brings with him a smart and talented team that, when combined with ours, will be the best in retail.

"5) Together, Jet.com and Walmart can win the future of retail. We’re in the business of “saving people money so that they can live better.” But the value of our customers’ time cannot be overstated. To win the future of retail, we must save customers both money and time. By combining with Jet.com’s technology, shopping experience, customers and talent, we will do exactly that. We will exceed their expectations!"

In a separate press release, the Journal reports, Walmart said that "as part of the transaction, approximately $300 million of Wal-Mart shares will be paid over time. Lore himself will receive more than 3.5 million shares of Wal-Mart common stock, worth about $250 million as of Monday, to be paid over a five-year period."
KC's View:
Probably not a surprise that the word "Amazon" is not mentioned in the McMillon posting, but you know that this is the context for pretty much everything Walmart is doing in this regard.

As I've said here before, I'm not sure that Jet is the answer, nor that Lore will be a long-term player within the Walmart corporate structure. But let's be clear. We don't live in a world where either Walmart or Amazon can win with e-commerce, but not both. There is plenty of business out there for both of them, and I think that in many ways they appeal to entirely different customers bases ... and so while they compete, and each will raise the bar for what the other can and must do, it would be a mistake, I think, to see this as a death match in which only one can win.

Both can be winners. And they'll together drive the e-grocery business, which will further prove the study we discussed above in "The Innovation Conversation" to be out of touch with reality.