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Walmart overhauls Jet.com as online business fails to deliver results

By Reuters

Walmart Inc on Wednesday announced a sweeping overhaul at Jet.com, an e-commerceRead full story

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  • Victor Anthony
    Victor AnthonyInternet Equity Analyst at Aegis Capital

    So Walmart paid $3B for an aqui-hire? No way Jet.com was doing anywhere near $1B in sales in 2016 even with the acquisition of Shoebuy from IAC. I would be surprised if Jet.com did $100M in sales that year. Walmart knows they grossly overpaid for Jet.com, which was the new shinny object at the time, with glowing articles by the press, and a larger than life founder. I remember this well because of constant questions from investors about competition with Amazon. A bit of a unique twist intially on

    So Walmart paid $3B for an aqui-hire? No way Jet.com was doing anywhere near $1B in sales in 2016 even with the acquisition of Shoebuy from IAC. I would be surprised if Jet.com did $100M in sales that year. Walmart knows they grossly overpaid for Jet.com, which was the new shinny object at the time, with glowing articles by the press, and a larger than life founder. I remember this well because of constant questions from investors about competition with Amazon. A bit of a unique twist intially on how they acquired customers and even with distribution. Plus the purple boxes were popping up in lobbies in apartment buildings in NYC, where many Amazon investors live. No one sees Jet.com boxes among the Amazon boxes in their lobbies anymore. So no surprises that Walmart moved to deemphasize it. Amazon is the best e-commerce company in the U.S. but consumers need a strong competitor and hopefully Walmart is it. 

  • Mike Osswald
    Mike OsswaldExperience Innovator

    As I recall, Jet.com had an innovative approach early on, but all that changed. This article doesn’t explain any of what made them valuable as a business.

    Essentially aggregating inventories of many sellers (goods already distributed throughout the country), the marketplace algorithms would optimize a customer’s cart as they added items, by changing who would fulfill the various pieces.

    The idea that slow moving inventory already in a mom and pop shop nearby could be sold by being part of a huge

    As I recall, Jet.com had an innovative approach early on, but all that changed. This article doesn’t explain any of what made them valuable as a business.

    Essentially aggregating inventories of many sellers (goods already distributed throughout the country), the marketplace algorithms would optimize a customer’s cart as they added items, by changing who would fulfill the various pieces.

    The idea that slow moving inventory already in a mom and pop shop nearby could be sold by being part of a huge aggregator (even having that shop dynamically drop their price if a few things could be passed to one customer) was something neither Amazon nor Walmart could do.

  • Shaun Stewart
    Shaun StewartproCEO at New Lab

    Not sure many are surprised by these developments - was a questionable acquisition at $3B+ and has shown little progress and promise in stealing marketshare from Amazon...

  • David Yakobovitch
    David YakobovitchAI Professor at Galvanize

    I think Jet.com is still helping Walmart and is good competition for the e-commerce industry. For Walmart, a talent acquisition is more important than the platform.

  • Weiyee IN
    Weiyee INChief Strategy Officer

    There is a long history of companies buying competitors to effectively either integrate them or put them out of business, but from the announcements and discussions made publicly in 2016, this does not seem to be the case. It seemed very much that Walmart was looking for this acquisition to be a way to catch themselves up to Amazon and drive an online platform for Walmart. Instead this looks very much like a slow and painful integration that simply did not produce the desired results.

  • James Cakmak
    James CakmakEntrepreneur | Tech Analyst

    The problem for Jet is there is insufficient points of differentiation to Amazon. And when consumers have sunk costs with Prime, deepening customer engagement and wallet share is exceedingly difficult. Attracting customers is one thing, retaining them with regularity is another. Walmart is advantaged vs Amazon in grocery (current state), but with retail more broadly the game will continue to be catch up.

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