Walmart has officially confirmed the rumor that they finalized a deal to buy Jet.com, an acquisition that reportedly went down over the weekend. In the deal, Walmart will pay out $3 billion in cash, and $300 million in Walmart stock as an executive incentive plan over time.
Walmart Goes Big Or Bust
This is an interesting move by the giant big box retailer. It is also the as-of-now largest online acquisition in the US, and a big step for a company that has been struggling to grow on the digital market.
It is also a surprising risk for the brand, which has been unable to really compete against online super giant Amazon since day one. Jet.com has been going gangbusters, and is sure to grow. But at the heart it is a 2-year-old startup that only began making wider sales a couple of months ago.
The potential for this deal to go south is a very real one, but Walmart execs seem pumped about it. Enough so that they gave the head honcho seat for head of Walmart’s ecommerce site over to Jet.com’s CEO Marc Lore. He will also continue running Jet.com, possibly creating a bridge between the two retailers.
Jet.com: A Match Made In Heaven
If this were merely a buyout, I would raise my eyebrows. But retaining Lore, and giving him full control over the original Walmart website to run as he sees fit? That is where this acquisition makes perfect sense.
Walmart.com is a nightmare to shop on. It is slow, clunky, has broken links, and is difficult to navigate. Their on-site search is a joke, and you rarely find what you are looking for in the slew of completely unrelated products. And you can’t even narrow down by category because so often their products are mismatched, or the category descriptions aren’t descriptive enough to know it is what you wanted in the first place.
Say what you like about Jet.com, but it is an ecommerce site that knows how to sell products. It is intuitive, well designed, easy to use, and fast. They didn’t make design mistakes that any non-professional who has read a DesignModo blog post would know to avoid. They are also aware of how to best present deals to an audience of millennials who have a certain expectation.
With Walmart struggling under some serious image issues (no one likes admitting they shop at Walmart), and a horrifyingly bad online strategy, they need some fresh blood to come in and sweep it all away. Lore might just offer the vein.
Source: Walmart
