Wal-Mart Eyes Jet.com for Acquisition

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Wal-Mart’s sputtering e-commerce machine may find a fix in jet.com. Sources close to the deal are reporting that the retail giant is actively in talks with the year-old start-up.

Wal-Mart’s $13.6 billion in e-commerce sales last year is a distant second to Amazon’s $82.8 billion and has actually shown signs of declining. A deal with Jet could be exactly what Wal-Mart needs to make up lost ground in online sales and help keep its promise to add 1 million new products per month to its online shops.  This potential acquisition, valued as high as $3 billion, is just one of many steps Wal-Mart is taking to significantly increase its web sales model including e-commerce, mobile payments, premium fulfillment memberships, drones and robotics. Jet’s sophisticated pricing models take into account basket size, proximity to customer and other factors to offer a price that in many cases beats both Amazon and Wal-mart. That, combined with their distribution network and customer data, are all assets to the stuck-in-the-past brick & mortar giant.

Jet reported $90 million in merchandise sales in May 2016, a near 300% growth from just 5 months prior. Despite tremendous growth, Jet itself is also facing Amazon as its direct competitor. Wal-Mart could be exactly what Jet needs to scale at an enormous rate in order to compete with Amazon.

 

 

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