We’ve all been hearing and reading quite a bit about Walmart’s recent acquisition of newbie-online retailer Jet.com, and what the implications are for Walmart’s struggling digital presence—as well as the impact to the retailer’s physical stores.

As I read and think through how this may all pan out, other news headlines come to mind, such as Macy’s announcement of 100 store closures, Target’s move into more urban locations with smaller store sizes and the increasing popularity of dollar store / value format. For certain, these speak to the continual evolution of the retail industry, and how some of the largest players are trying to position themselves to maintain relevancy and their competitive edge.

For Walmart, the $3.3 billion acquisition of Jet.com represents a huge investment in a relatively young retailer in the hopes of acquiring and capitalizing on the digital company’s “innovative and fresh” approach to online retailing, as well as to entice Millennials and younger consumers, with which Jet.com is popular, to the Walmart brand. At this point, Walmart insists the two banners will remain distinct, but Walmart will leverage Jet.com’s investments in data, user interface design skills, and analytics as well as its supply chain and distribution capabilities—not to mention tapping into a more affluent customer base—to strengthen the retail giant’s digital presence.

But will it be enough?

A Forbes article mentions that, “Converting Walmart into a nimble e-commerce competitor is a little bit like asking an Olympic athlete who has trained all his life as a weightlifter to suddenly become a gymnast.” Tongue-in-cheek for sure, but the author went on to say that the only way Walmart will truly reap benefits from this massive investment is to fundamentally change the culture at Walmart, internally at the leadership level down to the store associate level as well as externally for shoppers. I could not agree more.

I will admit that I am assuredly not an avid Walmart shopper—this is not a value statement or a reflection of my opinion about the brand, but I prefer the experience, familiarity, and store assortments of the brands I do shop on a regular basis. However, I have close friends who procure the majority of their groceries and household supplies from Walmart, in addition to a fair amount of clothing for themselves and their families, and they love the brand. Further, on the few trips a year I do make into Walmart, I typically will leave the store with much more than I anticipated buying. For me it’s still always a surprise at seeing such low prices across such a massive assortment—yet it is not enough to make me a regular Walmart customer.

I have only shopped Walmart.com once, and it was only after thoroughly researching a big-ticket item and discovering Walmart’s price was the lowest by a substantial amount. However, my subsequent ship-to-store pickup experience was less than optimal. As a consultant, I realized a lot of the delay and confusion the store staff experienced in actually locating my order (and then the item itself) was most likely due to improper design and /or execution of processes to support in-store fulfillment of online orders, lack of training, and / or insufficient systems to really make the process efficient and pleasant. I’ve heard many similar stories about Walmart.com shopping experiences—underpinning the sentiment that the company really needs to fundamentally and holistically rethink how they can achieve success in blending their digital and physical presence. This evolution needs to go far beyond data, analytics, logistics and user interface and must transcend into the roles the store staff must play and further into the overall customer experience to lure shoppers that are reluctant to shop the brand.

I only recently explored Jet.com, amid all the chatter about Walmart’s acquisition—and while doing so, I pondered if the new relationship would spur additional “discovery” of the younger brand through any marketing efforts Walmart may employ to drive Jet.com traffic – but on the flip side, how important will it be for Walmart to maintain the individual brand identities, especially for consumers who are not Walmart fans?

The Jet.com user interface is simple and intuitive, as expected. I checked the prices of some items I buy routinely, and they were about the same as Amazon’s pricing, with some more / some less competitive with brick-and-mortar pricing (which is similar to what I’ve found on Amazon). I was very surprised to see that there are no customer reviews of items on Jet.com. This may be a deal-breaker for many people (including me) to even considering using Jet.com—despite potentially lower pricing. Research indicates that close to 90% of all customers regularly or occasionally research products online, with over half using either Amazon (34.2%) or Google (19.0%). Even Walmart.com has customer reviews, albeit probably not as widely populated as Amazon’s – even with Amazon’s recent ban of incentivized customer reviews. Does the company expect shoppers to seek out product reviews elsewhere and then go back to the site to finish their purchase? Seems like a lot of clicking around—in an environment where fewer clicks are desired—especially for mobile shoppers. My take is that the site has some interesting features like deals and additional discounts for buying multiple items or adding to the shopping cart that may attract traditional Walmart customers and tug the interest of Amazon loyalists. But I’m not convinced it’s enough to make millions stray from their beloved Prime status.

So how Walmart ultimately ends up capitalizing on its recent acquisition of Jet.com is still a topic of much debate and analysis. Personally, I think both retailers still have some substantial operational, cultural and customer experience challenges to overcome if they are going to play well together and capture enough consumer wallet share to substantiate $3.3 billion. As more and more retailers are realizing that that lower prices do not necessarily equate to purchases, we have started to see a decided shift back to customer service, consumer ease and confidence in brand reliability – and consumers are willing to pay for these incentives.

Some key things Walmart will have to do to keep both brands successful and continue to grow include:

  • Maintain a comparable assortment to competitors and continue to explore different physical store models, fulfillment options and new location types
  • Combine and leverage the data that both brands have collected to better serve existing customers and attract new shoppers vs. simply morphing into Walmart.com 2.0
  • Seamlessly merge the digital and in-store experience – requiring fundamental changes to the traditional Walmart mindset and a significant overhaul of store level processes, roles and responsibilities, as well as company culture
  • Leverage the power of customer reviews and / or advocates (online celebrities, bloggers, etc.)
  • Focus marketing efforts and messaging towards new shoppers to promote initial trial or re-trial of the company’s digital and / or in-store offerings (once these are truly enhanced)

Shop on.

Published On: October 13, 2016Categories: Current Events, Customer Experience, eCommerce, M&A, Tricia Chismer Gustin