Wal-Mart Stores Corp. is on a shopping spree for online retailers that could bring the world’s largest retailer a more educated and affluent shopper.
A recent analysis by Bizrate Insights of consumers shopping Walmart.com and the websites of four e-retailers it’s acquiring—and one it’s rumored to be about to buy—shows that the acquisition targets attract a significantly different kind of shopper.
The four companies Wal-Mart has acquired—Jet.com, Moosejaw, Shoebuy.com Inc. and ModCloth—along with rumored acquisition target Bonobos, sell to consumers who look different on certain demographic metrics than those that shop at Walmart.com.
For example more than two-thirds of the customers of those five retailers have a college degree versus less than half for Walmart.com, and more than 57% live in households with annual income in excess of $75,000 versus 41.5% for Walmart.com. That analysis is based on data from nearly 1,000 consumers who shopped online at Walmart.com and the other five companies’ websites in April.
“It appears these deals will bring Wal-Mart a kind of online shopper that doesn’t often shop at Walmart.com today, and that can position Wal-Mart to compete more effectively against the likes of Amazon,” says Scott Macon, president of Bizrate Insights, which collects and analyzes online consumer data. Time Inc. acquired Bizrate Insights last year.
There is relatively little overlap between Walmart.com and the companies it’s adding to its e-commerce portfolio. Only about one in six Jet.com shopper has shopped Walmart.com in the past six months, and the percentages are under 10% for the other four online retailers.
Acquiring these companies will bring Wal-Mart some new online business, but the bigger reason Wal-Mart is buying these online retailers is to acquire e-commerce talent, says Anderee Berengian, CEO of Cie Digital Labs, which helps retailers and brands develop technology. He says big retailers like Wal-Mart struggle to attract the top talent in Silicon Valley, and these acquisitions “are a way to get the brainiacs they couldn’t get because they wouldn’t work at Wal-Mart.”
Wal-Mart is No. 3 in the newly released Internet Retailer 2017 Top 1000. Amazon.com Inc. is No. 1.