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Wal-Mart buying Jet would be a win for Wal-Mart, Jet, consumers and yes, of course, Amazon

The news of the top retailer looking to acquire the newest Amazon.com competitor has consumers and industry watchers talking.

August 5, 2016 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com

The news of Wal-Mart wooing Jet.com for acquisition hit the headlines fast and furious thanks to a Wall Street Journal report claiming the nation's top retailer is aiming to buy the newest online retailer which made a splash a year ago in a quest to knock Amazon off its perch.

It wasn't as much as a shock response after the news broke, but more a 'good move' response from consumers and industry watchers.

"Acceleration in the fast placed world of retail takes many forms. It's becoming more common for retailers and eretailers to join forces when it can provide mutual benefit—one of the more recent examples would be Target and CVS. The potential partnership between jet.com and Walmart would provide both parties scale in their established areas of strength," Traci Gregorski, senior VP, marketing, at research firm Market Track, told Retail Customer Experience (RCE) in an email.

Jet.com, the only one of the three parties to respond to an inquiry from RCE on the report, stated the following: "At this time, we don't have any information at this time to confirm or deny the article's information and will keep everyone updated once we have more information on the subject."

No denial and no affirmation from Wal-Mart isn't a big deal. The WSJ did not indicate in its report if it had reached out to the involved parties and only cited a 'source close to the news,' as evidence an acquisition is in talks.

The fact Amazon hasn't commented isn't surprising either. I'm guessing they're still busy doing the happy dance in CEO Jeff Bezos' conference room or taking a space flight in celebration.

Wal-Mart leaders and staff are also likely dancing over the supposed news. After all, the move, as Pymnts.com notes, would give Wal-Mart Jet's pricing software and maybe most important, an "alternative online commerce portal for high-income shoppers who have a psychological aversion to shopping at Walmart or Walmart.com."

Yup, Wal-Mart could solve one huge problem it's been wrestling with for ages—how to get a viable ecommerce environment in place—and for Amazon the purchase would just be more validation of its successful, innovative and lucrative ecommerce strategy.

Jet, let's be blunt, did not strike any fear in Bezos' heart or its investors. While Jet CEO Marc Lore talked a big game from the moment Jet launched, it's been one big year of challenges and a major strategy reset (i.e. the free membership and delivery charge approach).

Most of all, the reported union could and would be a boon to consumers who love Wal-Mart and who love shopping online. With the Jet platform to drop in (and hopefully some very fast and innovative tweaking to make it more user friendly and less cumbersome), each and every Wal-Mart item will be in just as close reach as they are on the retailer's store shelves. As Pymnts noted, it opens Wal-Mart to that big pool of shoppers who aren't keen at being seen shopping at the retailer.

And that's quite a few I believe.

Is the union worth $3 billion for Wal-Mart, as WSJ reported? Yup, it sure is. Wal-Mart has likely spent a few billion trying to get its current online storefront to be as crowded and as popular as its brick-and-mortar locations and hasn't succeeded. Jet's been experiencing pain from its start – as have the consumers stopping by. As one WSJ reader noted it's "painful" to shop at Jet even with the supposed 15 and 20 percent discounts in play.

Market Track, in a media note sent shortly after the WSJ report, states the move by Wal-Mart comes as no big surprise. 

"As competition in the online space continues to accelerate, it is not surprising that a firmly established brick-and-mortar retailer would look to partner with Jet.com. They are disrupting the already volatile ecommerce space by providing a different model for pricing, and putting competitive pressure on the likes of Amazon and other eRetailers," states the industry research firm.

Acknowledging Jet's approach to give consumers bigger discounts as their online cart filled up was a game changer, Market Track's Gregorski said that innovation is just one reason why Wal-Mart may be in retail lust.

"Consumers are extremely cost conscious, and the ease and frequency with which shoppers are comparing prices online introduces heightened competitive pressure. It makes sense that they would be an attractive partner to traditional retailers in order to offer scale and acceleration of their digital capabilities," noted Gregorski. 

As the retail industry awaits further news regarding the potential deal there is another exciting scenario to consider — maybe there will be news China's etail leader, Alibaba, is also eyeing Jet, given its clear interest in breaking into the U.S. consumer ecommerce marketplace.

A showdown for Jet, involving Alibaba vs. Wal-Mart, would be a match most would pony up admission to watch.

About Judy Mottl

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Judy Mottl is editor of Retail Customer Experience and Digital Signage Today. She has decades of experience as a reporter, writer and editor covering technology and business for top media including AOL, InformationWeek, InternetNews and Food Truck Operator.

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