Walmart is stepping up its fight against Amazon by paying $3.3 billion for e-tail startup Jet.com – the largest-ever acquisition of a private e-commerce company. While it may be an uphill battle, the deal provides further evidence that Walmart is better equipped than any other Big Box retailer to take on the e-commerce giant, especially with Jet.com’s founder at the helm.
Ranked second in L2’s Digital IQ Index: Big Box for its strong digital competence, Walmart has focused on developing a comprehensive omnichannel strategy as well as investing billions to develop its e-commerce channels. The retailer’s Black Friday strategy exemplifies its growing emphasis on e-commerce. Last year for the first time, the retail giant offered most sale items online before selling them in stores and promoted new online specials every day during the holiday shopping season. As a result, Walmart fell above other retailers in search visibility during the season, particularly in the Consumer Electronics and Sporting Goods categories.
Yet Walmart fell consistently behind Amazon, according to L2’s Black Friday report, and its online business continues to dwarf that of its rival. The retailer generated $13.7 billion in e-commerce sales last year. In comparison, Amazon earned more than $92 billion.
The Jet acquisition could help Walmart bridge that gap – mainly by shaking up its e-commerce leadership. With Jet co-founder Marc Lore running its e-commerce business, Walmart gains a leg up in the competition.