LOS ANGELES — It was the one year anniversary, almost to the day, of Walmart's $3 billion acquisition of Jet.com when the e-commerce startup's founder Marc Lore took the stage at Shop.org in Los Angeles on Tuesday.
Lore, now the president and CEO of Walmart's U.S. e-commerce group, appeared unchanged by the experience of working for the retail giant. And that's exactly how wants it — to keep and cultivate a startup mentality within the world's largest retailer.
"Not a lot has changed in terms of how we're operating — it [still] feels like a startup right now," he said during a morning keynote. "We share a common set of core values and built a foundation of trust early on. In order to run as fast as we're running, the team has to be empowered. You can't do that without trust."
Jet and Walmart are indeed running fast. Right out of the gate, the company made a series of high-profile e-commerce acquisitions following the Jet deal, first snapping up ShoeBuy.com for roughly $71 million then buying Moosejaw for $51 million. More deals followed in quick succession, including women's apparel e-commerce retailer Modcloth and high-profile menswear brand Bonobos for $310 million. All these brands cater to a younger and hipper demographic than the traditional Walmart shopper.
"We're looking to build a portfolio of brands. ... It's an asset purchase more than ROI."
President and CEO, Walmart e-commerce US
Each acquisition is strategic for a different reason.
"The acquisition strategy is two-pronged," he said. "We're looking for [companies] that can help accelerate the long tail into a category," such as home goods, outdoors and shoes. These deals include ShoeBuy, Shoes.com and Moosejaw, which will all operate under the larger Walmart banner and are intended to help extend Walmart's reach into their respective product categories. (ShoeBuy CEO Mike Sorabella now leads the footwear category for Walmart across channels.)
Other deals are more offensive plays, such as Bonobos and Modcloth. "We've seen them connect with millennial consumers in a way that I've not seen others do," Lore said.
Regardless of the acquisition, Walmart and Jet's acquisition strategy is for the long term, not about immediate ROI. "We're looking to build a portfolio of brands," he said, in answer to a question about whether the retailer can monetize its new assets. "We're trying to accelerate growth on the existing site. It's an asset purchase more than ROI."
To that end, Lore's team is involved in a variety of tests on the delivery side. He believes it all comes down to the core tenet of retail: merchandise.
"The internet allowed us to be better merchants," Lore said. "We'd been shipping product to customers for decades." The internet has made doing that more efficient but it's still about merchandising. "Some people really missed that," he said.
"We shouldn't be chasing the tech as much as the merchandising aspect that goes along with it."
President and CEO, Walmart e-commerce U.S.
Case in point — voice assisted shopping and artificial intelligence. "People are talking about AI, but we should be talking about how it lets us think about merchandising in a new way," he said. "We shouldn't be chasing the tech as much as the merchandising aspect that goes along with it."
Lore views retail as increasingly channel agnostic and Walmart, with its many points of distribution, is experimenting with a variety of methods to get product to the customer. One such method — the controversial test that has store associates delivering goods on their way home from work — is going well, he said.
"We asked for volunteers and got 10 times more than we could test with," he said. "The demand is there. We're early days, but I think that's the future."
The future will also include a few key technologies on view today at Shop.org and other venues. "I'm really bullish on voice, virtual reality and artificial reality," he said. "Some seem closer than they really are — most will eventually come to fruition."