Despite the fact that Walmart has decided to completely absorb Jet's online business into its mainline website, Walmart CEO Doug McMillon says he wouldn't hesitate to make the $3.3 billion acquisition all over again.
"Absolutely … “If you look at the trajectory of our business, it changed when we made that acquisition," he told CNBC. “Not only did we pick up Marc Lore ... we picked up fulfillment centers — a lot of expertise that ended up paying off." (Lore was Jet's founder, who then starting running all of Walmart's US e-commerce business.)
The story continues: "As a result of the deal, McMillon went on, the Walmart brand is now reaching younger and more affluent customers, and also has been able to bring new brands, such as water bottle maker S’well, to Walmart.com. 'That was the other role that I thought Jet was going to play,' the CEO said. Brands are more 'comfortable,' selling on Walmart now, he said."
However, CNBC writes that "critics have contended … that Jet.com was only a money-losing venture for Walmart.
"Trying to play catch up with Amazon, adding faster shipping options and more third-party sellers, has resulted in a string of investments and expenses that have been a drag on the profitability of Walmart’s bricks-and-mortar shops."
- KC's View:
I think these critics are wrong.
Not that every Walmart acquisition has paid off.
But … the problem with the criticism, at least as expressed here, is that it thinks of Walmart's business model as store-centric. Which, of course, it always has been.
But in the current environment and going forward, I think retailers - no matter if you are Walmart or a one-store independent - have to think of themselves as being relentlessly customer-centric.
Stores are part of that, of course. But retailers are going to have to make investments, take chances, make mistakes … and learn, learn, learn.
I have no doubt that Walmart learned a lot from Jet and Lore.
The only mistake will be if it goes back to the same old way of doing business, simply because that always was the way it did business.