Wal-Mart and Jet shore up each other’s weak spots, say some retail industry watchers, but questions remain about whether the $3.3 billion deal will be enough to better compete with Amazon.

Wal-Mart Stores Inc.’s purchase of Jet.com Inc. could breathe new life into the retailer and online marketplace. Each company brings attributes the other lacks or aims to strengthen, and e-commerce experts are curious about how they’ll look when integrated.

Wal-Mart, No. 4 in the Internet Retailer 2016 Top 500 Guide, announced Monday that it is acquiring online marketplace Jet.com in a $3.3 billion cash and stock deal to be completed later this year.

Jet founder and CEO Marc Lore, who as part of the deal will take over Wal-Mart’s e-commerce operations from Neil Ashe at the end of the year, weighed in with his first public comments since the acquisition. In a LinkedIn post on Tuesday he acknowledged that Jet joining forces with Wal-Mart might not make much sense on the surface.

“An upstart retailer and an industry stalwart might seem like an odd pairing, but Jet and Wal-Mart are united by a common sense of purpose,” he writes. “Fundamentally, Jet and Wal-Mart share a deep and abiding focus on customers. We’re both obsessed with saving people time and money, and we will do that together by offering a wider assortment, better prices and more delivery and pickup options.”

Data shows that Wal-Mart and Jet shoppers don’t overlap much, and adding Jet to Wal-Mart’s mix could grow customers and sales.


“Jet has a pretty strong millennial base,” says Guru Hariharan, CEO of retail and e-commerce pricing analytics firm Boomerang Commerce. “Wal-Mart has the store network, the ZIP code-level presence, but they haven’t been able to demonstrate a high-tech [approach] to compete with Amazon.”

Data from marketing analytics platform Jumpshot shows that from May-July of this year, 66% of shoppers who bought on Jet also bought on Amazon, compared with a 12% overlap between those who bought on Jet and those who bought on Walmart.com.

An analysis of Walmart.com and Jet.com using web analytics company SimilarWeb’s platform shows the following:

  • Walmart.com had 302.4 million visitors last month, compared to 23.5 million visitors to Jet.com. In the past 12 months, Wal-Mart had 3.5 billion compared with 261 million for Jet.
  • Wal-Mart also had a greater share of mobile visitors than desktop visitors, with 60.67% of its visits coming on mobile devices compared to 55.94% for Jet.

Data from Slice Intelligence shows that Wal-Mart’s online shopper base skews more heavily female—62% for Wal-Mart compared to a 51% for Jet.


Wal-Mart CEO Doug McMillon says several factors attracted Wal-Mart to Jet, including Jet’s personnel, business model and product selection.

“Jet has been able to attract some brands that we don’t have at Wal-Mart which is one of the reasons why we’re excited about this acquisition,” he says. “We’ll keep the spirit and focus of both brands independent and leverage some things on the back end that make us more effective across both.”

McMillon says Wal-Mart and Jet will continue as separate brands for now, though some think that could change.

“Jet may go away and the Jet engine may just be driving it (Walmart.com), and it’s a powerful engine behind that site,” says Eric Schiffer, chairman and CEO of Patriarch Private Equity. “That’s what they [Walmart] are buying.”


The Jet acquisition is Wal-Mart’s way of trying to slow Amazon’s increasing share of U.S. e-commerce sales, which grew from 25% in 2012 to 33% last year. But Wal-Mart’s acquisition of Jet won’t necessarily change that.

“This combination of a massive brick-and-mortar footprint with an emerging e-commerce player would put both companies in a better position for battle,” says Stephan Schambach, who founded e-commerce technology provider Demandware and now runs mobile shopping platform NewStore Inc. “I still don’t think they’ll be able to beat out Amazon, but it will be interesting to watch them try.”

“Jet is selling now because it cannot fulfill its promise of competing with Amazon,” Forrester analyst Adam Silverman says. “The deal only makes sense to Wal-Mart if they can acquire new customers at a reasonable cost per acquisition (CPA). Yes, Wal-Mart would get the ‘smart cart’ and dynamic pricing engine, but the business model will need to be altered to allow Wal-Mart to make a profit.” Jet has become known for its smart cart, which allows shoppers to save on products by buying in bulk or foregoing returns.

Shoppers won’t notice a big difference in the short term. “It’ll take some time for the customers to see a difference on Walmart.com” says CEO McMillon. “Hopefully people will check out Jet.com in the meantime and continue to drive growth there.”


Despite challenges, Wal-Mart’s acquisition of Jet might serve as an example for other retailers.

“Wal-Mart’s acquisition of Jet.com highlights the epic struggle of today’s bricks-and-mortar retailers in competing against the online powerhouse, Amazon,” says Rob Murphy, vice president of marketing at marketing technology company Swirl.

“Of course, not every retailer can afford a $3.3 billion channel investment so, for almost everyone else, leveraging existing assets in new ways is a much more attainable path for the future,” Murphy says. “By leveraging brick-and-mortar locations to generate greater insight into individual consumer preferences and then using that insight to personalize every customer touchpoint, including in the store, retailers may finally be able to fight back against Amazon’s massive online marketing machine.”