When Walmart said on Monday (Aug. 8) that it was buying Jet.com for over $3 billion, it was widely interpreted as the retail giant getting serious about competing with Amazon. That's hardly what is happening. The technology from Jet is fascinating; that's what is really behind this move.
Walmart.com has been serious about taking on Amazon for years. The problem has been that Walmart's top brass has simply refused to shed its store-centric mentality, thereby forcing Walmart.com to have to have to be subordinate to physical stores at all times. If an effective Walmart.com strategy might rob some sales from its stores — even if it still makes more money overall for the company — that strategy wouldn't be approved. Therefore, the real question is whether this acquisition indicates that Walmart senior brass are now willing to let online do what makes sense for online.
"I would say that the spending of $3.3 billion — and having [Marc Lore, the CEO of Jet] become their head of e-com — shows that they are finally truly ready to embrace e-com," said Joel Citron, director of advertising technologies for the Ai Media Group. Walmart has been "trying, but they did not have the right people with the right mindsets and the right technical stack in place to compete. They kept on trying to copy or keep up with their competitors, and it wasn't working. Buying Jet gives them something fresh and gets them great leadership as well."
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