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Walmart announced yesterday that its Jet e-commerce business will be integrated into its the company’s mainstream business, though Jet will continue to be marketed as a separate brand, largely in urban areas where not being Walmart is seen as an advantage.

Walmart bought Jet three years ago for $3 billion.

Simon Belsham, the president of Jet, will leave the company, though he will remain there until late summer to facilitate the transition.

In a blog posting, Walmart e-commerce president and CEO Marc Lore said that “across most of the country, we saw we could get a much higher return on our marketing investments with, so we’ve dialed up our marketing spend there. However, in specific large cities where Walmart has few or no stores, Jet has become hyper focused on those urban customers … While this has made Jet smaller from a sales perspective, it has helped us create a smart portfolio approach where our businesses complement each other … Jet continues to be a very valuable brand to us.”

The Wall Street Journal writes that “Walmart said it isn’t planning to cut jobs and expects existing Jet employees to move to new roles within the retail giant. It declined to say how many employees work at Jet, an online seller of groceries, clothes and electronics, whose main offices are in Hoboken, N.J.”

In its analysis, TechCrunch writes: “After Walmart acquired Jet in 2016, it merged a few of its teams, including supply chain. Combining fulfillment centers and mirroring inventory helped Walmart build its delivery logistics , enabling two-day free shipping and free next-day delivery without a membership fee, making it more competitive with Amazon, which charges a fee for its Prime program.

“ relaunched last year to focus on customers in big cities, like New York, with a product assortment tailored to their shopping preferences and three-hour grocery delivery to compete with Amazon Prime Now.”

In its report, Reuters writes that “Walmart has put more emphasis on shopper perks such as same-day delivery and curbside pickup of groceries ordered online, focusing on food and grocery sales using those delivery methods. Jet, as a platform to sell similar items, has fallen by the wayside … The Jet overhaul is the latest sign that Walmart is attempting to fix the ways it reaches shoppers using different websites and delivery methods. Earlier this year, it ended a delivery partnership with Google-backed Deliv and last year Reuters reported its struggles to use its own employees to deliver products.
KC's View:
A few years ago, Walmart was making noise in the fashion business, but I thought any real commitment to the category ended when it moved its fashion business from New York to Bentonville … which, nice as it is, is not exactly the hub of the fashion world.

I don’t think this is the same thing, in part because Marc Lore is still there, and he’s been instrumental in making Walmart a lot more nimble and digital-centric than it was in the past. It seems to me that as long as they can keep the disruptive culture promulgated by Jet alive within the company, they’ll be okay. But whether it can do this remains an open question…

Back in 2017, after Walmart acquired Jet, it made some news when it ended on-site happy hours at Jet’s New Jersey offices … drinking in the office was not in synch with Walmart’s culture. (Neither was swearing, which Walmart also banned … apparently never having seen an episode of “The Sopranos,”) Later on, Walmart backtracked on the drinking, but the move told us something about culture and instincts.