In a big move to increase its presence in the digital marketplace, Wal-Mart announced earlier this week its acquisition of online retailer Jet.com, a relative newcomer to the field that promises bargain prices and fast delivery for its rapidly-growing customer base.
Wal-Mart will pay $3 billion in cash and $300 million in stock for Jet, which launched in June 2015 and now offers more than 12 million wares from more than 2,400 retailers.
In a world where Amazon still dominates online shopping, Jet sets itself apart by utilizing real-time pricing algorithms that offer consumers rates from different retailers based on their proximity to the item, the efficiency of shipping, and other customizable features to build a “smart cart” of savings.
Though the two brands will remain separate entities, Wal-Mart hopes to bank off of Jet’s savings-focused strategy to enhance its own online marketplace. The supermarket chain reported a seven percent increase in global e-commerce sales for the first quarter of this year, down from eight percent the previous quarter and well below the 20% increase of two years ago. Though brick and mortar locations still account for 94% of retail sales across all industries, the future promise of growth in digital shopping is difficult to ignore.
“We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that’s what our customers want,” said Wal-Mart President and Chief Executive Doug McMillon in a statement. “It’s another jolt of entrepreneurial spirit being injected into Wal-Mart.”
CEO and co-founder of Jet, Marc Lore, said that the “combination of Wal-Mart’s retail expertise, purchasing scale, sourcing capabilities, distribution footprint and digital assets — together with the team, technology and business we have built at Jet — will allow the company to deliver more value to customers.”
The deal is set to close by the end of the calendar year, pending regulatory approval.
