Walmart Needs $3.3 Billion Jet.com Buy to Jump-Start Web Sales
NEWS ANALYSIS: With its in-house e-commerce efforts going nowhere, Walmart needs a way to challenge Amazon if it wants to remain relevant in online retailing.When Jet launched a year ago, part of the hype surrounding the new online shopping service was that it would be less expensive than Amazon and it would challenge Amazon in sales. A year later, it's not clear that either has happened. But Jet was able to attract millennials to its customer base in significant numbers, which is something. Walmart, on the other hand, has been trying to challenge Amazon by offering products online that could be delivered to buyers either directly or through product pickup at one of its brick-and-mortar stores. Considering how ubiquitous Walmart outlets are, in-store pickup is a viable alternative and it has some advantages. But Walmart was never able to really break in to online sales in a way that would challenge Amazon. For one thing, products on the Walmart website rarely were cheaper than what was on Amazon and fast delivery was only an option if the desired product was already in a store near you. While Walmart's online offerings were broader than what you'd likely find in one of its brick-and-mortar stores, its selection didn't challenge Amazon.
Still, there's more to e-commerce success than selection. To be useful to consumers, an e-commerce site also has to be able to offer the products at the price consumers want to pay, and they need to be delivered where, when and how the consumer wishes.