Walmart, the biggest bricks and mortar retailer in the world, is in talks to buy Jet.com according to the Wall Street Journal.
Acquiring Jet would extend Walmart’s capabilities and give them a much easier run at cutting a chunk out of Amazon’s business. Jet was set up to compete with Amazon in 2014, eventually launched in 2015 and already have 3.6 million customers and have turned over a billion dollars.
Jet’s proposition to allow you to sacrifice service for savings such as making multiple item purchases. Jet aims to save you money where they can and they do – they rapidly became ChannelAdvisor’s number 4 marketplace in the US beating established players Sears, Best Buy, Newegg, Tesco, and Rakuten.
Walmart’s advantage is their number of physical locations, but as with all supermarkets they’ve struggled to offer expedited shipping to their customers. Jet are laser focused on ecommerce service and all Walmart need to do is to plug their inventory into Jet and they’ll be ready to fly.
Would this pose a serious threat to Amazon? Walmart do after all have a marketplace and Jet are used to dealing with 3rd party merchants. Potentially if they get things right Walmart could dent Amazon’s US business but they’ve still got to compete with the lure of Amazon Prime.
Walmart’s ShippingPass costs $49 a year whilst Amazon Prime costs $99 in the US. But Amazon Prime isn’t just free next day shipping (or two day in the US), it’s video, music, groceries, photo sharing, Kindle books and so many benefits it’s hard to say no.
