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A Match Made in Heaven: Walmart’s Acquisition of Jet Proves Successful

Amazon, a onetime online bookstore, has grown to dominate the retail industry. However, Jet.com is ready to take on the online behemoth. Jet was acquired by Walmart in September of 2016 for 3.3 billion dollars. Walmart has notoriously struggled to tap into a more affluent customer base and Jet has designed its business model to chase the urban millennial. Walmart was drawn to Jet solely because of the customer base the company attracts. As Walmart struggles to build stores in urban areas, Jet is the key to an untapped market in the world of Walmart.

Walmart has started to transform Jet, a company that embraces startup culture, into a brand that is ready to compete with Amazon. Jet recently released its plan to start a private label brand entitled ‘Uniquely J’. According to a Business Insider article written on September 29th, the brand will “focus on serving that urban millennial customer [and]…the label will offer things like coffee, olive oil, laundry detergent and paper towels”. Amazon and German retail chains like Aldi and Lidl thrive off of their private label brands and Walmart is looking to capitalize on the growing demand for private-label merchandise. Uniquely J products are projected to be sold exclusively on Jet’s website for the first year. Products will eventually be sold in Walmart stores across the country pending the success of the brand.

Since Uniquely J will be exclusively available online, this raises the debate whether or not E-commerce is completely revolutionizing the consumer shopping experience. Many consumers have the ability to shop for anything they need at any time of day because of the advancement of technology. Uniquely J also allows Walmart to enhance the quality of its product base which amplifies the relationship Walmart has with its stakeholders. This new initiative also closes the loop between production and consumption. Walmart can invest money in only the products it needs for the Uniquely J brand as long as it remains online. Cost of production will become streamlined and waste will be cut down on. Uniquely J offers Walmart customers a new opportunity to indulge in the private-label market. Walmart simultaneously benefits from an expanding base of customers that Jet is likely to attract by the nature of its corporate culture which has a younger, fresher approach to the traditional Walmart brand. The acquisition of Jet is ultimately beneficial to Walmart corporation as a whole.

 

This article was originally posted: http://www.businessinsider.com/jet-walmart-weapon-vs-amazon-2017-9

Green, Dennis. “How Walmart Turned Its $3.3 Billion Acquisition of Jet.com into Its Greatest Weapon against Amazon.” Business Insider. Business Insider, 29 Sept. 2017. Web

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