Preview

Walmart is making its website more sleek, but where does that leave Jet?

What happened

  • Walmart, which continues to devote more resources to its ecommerce operation, plans to debut a resigned website that spotlights its higher-end brands and induces shoppers to spend more time browsing product offerings. Gone are the bright blue and the omnipresent Walmart banner in favor of a more sophisticated yellow “spark”—the company’s logo.
  • At the moment, Walmart’s website comprises 3.6% of the company’s sales in the U.S., with 100 million unique visitors each month—80 million fewer than Amazon.com.
Why it matters
  • Walmart’s website upgrades are not only about competing with Amazon by launching a more speciality experience for shoppers, but are also rooted in data: the company found that customers who shop at both its brick-and-mortar stores and online spend twice as much.
  • But at the same time, the company is consciously turning away from Jet.com—its more upscale offering that targets higher-income urban consumers. Walmart recently reduced Jet’s marketing expenses and saw traffic on the site fall by the millions. These advertising expenses were high to begin with, but the move might also mean that Jet isn’t performing well and that the marketing expenditure was actually inflating Jet’s customer base and sales—the same issue that caused Nasty Gal’s demise.
  • Marc Lore, Walmart’s head of ecommerce and founder of Jet.com, says that the decision behind directing more attention to Walmart is to build its core customer base—the idea is that it will be cheaper to acquire new customers with the Walmart brand while also bringing existing or potential Jet customers onto Walmart’s platform. But questions abound. For one, the website redesign is bringing the Walmart brand closer to the Jet brand. Even if the company is streamlining its operations in order boost Walmart, then what explains the launch of new standalone brands that are only available via Jet? Moving forward, Walmart will have to decide whether to incorporate Jet and its brands into Walmart’s ecosystem, which will likely uplift both brands, or keep them as separate operations.

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