Walmart Needs $3.3 Billion Buy to Jump-Start Web Sales

By Wayne Rash  |  Posted 2016-08-08 Print this article Print
Walmart ecommerce

"Hopefully a few of those ideas will resonate with shoppers too," she said.

Mulpuru said that when she's shopped at both Jet and Amazon, frequently she's found what she's looking for less at Jet. This parallels my own experience with both companies. It also provides a strong rationale for the merging of Jet and Walmart's online stores, if only because it gives Jet the range of products it needs and Walmart the web retailing expertise it needs. But will it work?

"This is a bet," Mulpuru said. "It could turn out like the early days of eBay and PayPal, or it could turn out like eBay and Skype. Time will tell." 

The biggest issue is likely to be whether Walmart gives Lore the freedom he needs to transform into the kind of e-commerce presence it needs to be. That would mean allowing some departures from Walmart's way of doing things that are strongly centered around its retail stores, even to the point of demanding that shoppers select their favorite store location before shopping online.

But one hopes that Lore will realize that Walmart brings a powerful capability that Amazon can't match: those same retail stores, which provide more than just a way for consumers to see and feel a product before they buy it. They also provide a secure delivery location and a way to return things that didn't meet expectations quickly and easily.

The Walmart-Jet acquisition also brings one more thing to consumers that they haven't really had in the past, which is a choice. While there are plenty of online retailers, for many Amazon was the only place that sells nearly everything someone wants to buy, and while the prices weren't always the lowest, they were close. But with the Walmart-Jet acquisition, there's competition.

Real competition between capable and credible online retailers would mean that consumers would see even better prices, better service or both. Walmart will have to start finding ways for one-day delivery—and not just store pickup. Amazon would have to find a way to offset the convenience of a physical store where consumers can see and touch products before they buy and where products can be returned.

Does this mean that Amazon will have to open more brick-and-mortar stores than just the one in Seattle? Perhaps, but it's unlikely it could reach the penetration of Walmart. The ultimate answer likely will mean more innovation from both companies—and that means consumers will benefit.

But this will work only if large numbers of consumers decide to do business with both retail giants. That means you will need to pay for both Amazon Prime and Walmart's ShippingPass. It'll cost another $50, but it's probably worth it.


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