Will Walmart become world’s largest omnichannel retailer with Jet.com deal?
Walmart has the potential to catch up to Amazon’s mcommerce prowess and surpass other bricks-and-mortar retailers on the omnichannel front following reports that it has acquired online discount retailer Jet.com.
Walmart’s decision to revamp its ecommerce model, which has experienced fledgling sales in the past year, has resulted in the brand purchasing Jet.com for approximately $3.3 billion. While opinions on the effectiveness and ultimate return-on-investment of the Jet.com acquisition differ among experts, many believe that the potential to receive access to scores of new customers in specific markets and greater analytics capabilities will result in Walmart climbing up a few notches in the mobile commerce space.
“For Walmart, the acquisition of Jet.com will mean the company will gain access to a new platform, which will drive growth in a more cost-efficient manner than its traditional bricks-and-mortar approach,” said Jennifer Sherman, senior vice president of product and strategy at Kibo Commerce.
“More than just offering a differentiated and economic sales and shipping model and driving scale via online sales, the acquisition of Jet.com will mean Walmart can very quickly become the world’s largest omnichannel retailer,” she said. “If Walmart can build the integrations and capability required for buy online, pick up in-store, (or potentially even ship from store) omnichannel clienteling and consumer personalization, then Walmart, will be close to cracking the code on omnichannel customer experiences for a demographic that has yet to be fully targeted for those programs.
“Walmart’s established bricks-and-mortar presence and reach could potentially deliver even more convenience than Amazon without the need for further distribution center proliferation.”
Jet.com, which offers mobile applications for iOS and Android customers, provides shipping and pricing deals on items such as groceries, consumer packaged goods, consumer electronics, apparel and accessories and more.
Jet.com differentiates itself from other online retailers with its pricing scheme, which encourages shoppers to place more products into their shopping carts for a chance to receive bigger discounts.
Therefore, the company has plenty of insight into the best ways to distribute incentives to consumers and drive additional sales at the point of checkout.
With mobile users being among the most prone to making impulse purchases – particularly if hefty discounts are available – Jet.com is well-positioned to help Walmart in this area once the acquisition is completed.
Jet.com’s mobile app
“The partnership would give both parties access to new audiences in the online and offline realm,” said Traci Gregorski, senior vice president of marketing at Market Track. “In terms of mobile, the reach will allow for additional scale and exposure, and will continue to play a role from not only a transactional standpoint, but also exploration and research.
“The intelligence that can be gained through online analytics is highly valuable, and will be a force multiplier.”
The acquisition will likely help Walmart become more of a mobile and online browsing destination, much like Amazon currently is – a notion that will help raise Walmart’s digital sales and supplement its strong bricks-and-mortar presence.
“With acquisitions and acqui-hires such as Kosmix, Luvocracy, One Riot, Social Calendar and Small Society, Walmart can enrich the straightforward but easy-to-use mobile offerings of Jet.com,” said Rick Chavie, CEO of EnterWorks. “What Jet.com brings is its demonstrated ability to get people to try its platform, not just for everyday buying, but there is also a bit of a treasure hunt aspect for prospects that is missing at Walmart.”
Customer engagement and analytics
By acquiring the online discount retailer, Walmart will be well-poised to glean valuable data surrounding customer purchase behavior and leverage it to enhance its own mobile offerings, such as its app and Walmart Pay mobile payments platform.
Amazon has been placing a greater focus on revamping its mobile shopping experience, which should signal its competitors to do the same.
Amazon’s menu on its iPhone app has a new design to make it easier to use, including the ability to swipe left for easy access and a new settings section where users can easily see notifications from the online retailer (see story).
While Walmart undoubtedly has access to analytics stemming from hundreds of thousands of shoppers, receiving access to Jet.com’s customer base will broaden its audience and enable it to explore new niche markets.
Additionally, Jet.com’s supply chain model may offer Walmart several pointers on how best to maximize its bricks-and-mortar order fulfillment centers and continue enhancing – and speeding up – its shipping options, especially as Amazon continues to roll out one-hour delivery services across the United States.
“Walmart can learn a lot about customer engagement by having information outside of its current universe of online shoppers,” Mr. Chavie said. “While it is fully capable of analyzing the market as well as anyone, with its big data and personalization assets such as Kosmix, it will have access to a set of customers that extends beyond its current base, opening up a rich opportunity for testing and learning.
“If Walmart can leverage the insights from Jet.com, it may be able to apply those learnings to its current business; however, the bigger play will be applying the supply chain expertise and assets that Walmart possesses to unleash the potential of Jet.com experiences to accelerate its growth.”