Only 6% of consumers have made a purchase using Jet.com in the past year, according to data from Episerver. So why did Walmart just pay $3.3 billion for the ecommerce company that launched last year?
According to Bloomberg, it’s all about the founder of Jet.com and his perceived ability to compete with Amazon.
Marc Lore sold his former company Quidsi to Amazon and stayed on for two years. According to Bloomberg, Walmart will require Lore to stay on to run Jet.com – and Walmart.com – for longer than that. “The deal combines Jet’s proprietary technology, customer data and Lore’s e-commerce know-how with Wal-Mart’s extensive supplier relationships and its $480 billion revenue stream that can be used to fight Amazon, the online market leader,” the news outlet wrote.
The Wall Street Journal reported that the current head of Walmart’s ecommerce unit Neil Ashe will leave the company after the acquisition.
The deal also seems to be about Walmart’s brand limitations – it’s known for low prices and not for having a hip vibe.
In announcing the pending acquisition, Walmart wrote, “The acquisition of Jet will infuse Walmart with fresh ideas and expertise, as well as an attractive brand with proven appeal, especially with Millennials, the first generation of true digital natives.”
A company called Field Agent did a quick poll of Jet.com users last week after rumors of the deal first surfaced. It screened its nationwide panel of almost 800,000 app-users to locate Jet.com customers and targeted them with a quick 8-question mobile survey, called Rapid Response Research.
Field Agent found that Jet.com customers liked Jet’s “everyday low prices,” while half indicated they particularly liked Jet’s “price drop as you shop feature,” which allows you to save more money as you add items to your order.
A spokesperson said that while the sample size of 250 was too small to generalize results to a larger population, the insights gathered provide an overnight indication of the attitudes and behaviors of Jet.com customers and what they thought about the potential Walmart acquisition, which you can read on the FieldAgent.net blog.
Walmart and Jet will maintain distinct brands, with Walmart.com focusing on delivering the company’s Everyday Low Price strategy, while Jet will continue to provide a unique and differentiated customer experience with curated assortment.
Walmart and Jet will leverage innovative technology solutions from both companies to develop new offerings to help customers save time and money.
Read the full release on the Walmart.com website.