Wal-Mart Jets Into Amazon’s Flight Path

Wal-Mart’s latest attempt to compete with Amazon for a share of the online retail market is a $3.3 billion deal for Jet.com, whose price-selection software the company believes can help make it competitive — even if it doesn’t send shoppers to Wal-Mart.

Jet.com is the 16th company Wal-Mart has added to its menagerie of online retailers in an attempt to unseat Amazon. The brick-and-mortar retailer’s online sales declined again in the first quarter, whereas Amazon is experiencing consistent growth, even if investors don’t seem to care about it. For the time being, Wal-Mart said both companies will operate independently, although it will be attempting to integrate some of Jet.com’s more popular features into its searches.

“Over time, piece-by-piece, we will end up running a business that is simpler and not completely independent,” Wal-Mart’s Chief Executive Doug McMillion said. “One of the things we really like [about Jet.com] is that the customer is even more in-charge of the price that they pay,” in part because they choose where to purchase an item from. That would difficult to accomplish if all links, however, led back to Wal-Mart — so for the time being, independence is the watch-word.

That, of course, makes it difficult to evaluate whether this is actually a good deal for Wal-Mart. As retail analyst Charlie O’Shea told Reuters’ Nandita Bose, even though Jet.com has added nearly 400,000 shoppers per month since it went live in 2015, the company is still vying for what will be, at best, the second most popular online retailer — which may sound like success to normal human beings, but doesn’t actually excite Wall Street.

 

 

Source

http://www.salon.com/2016/08/09/wal-mart-purchases-jet-com-in-yet-another-futile-attempt-to-topple-amazon/

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