Move could bolster retailer's online position

BENTONVILLE, Ark. — Walmart is in talks to buy online retailer Jet.com, according to a report by The Wall Street Journal.

Jet.com, which launched its e-commerce web site in July 2015, was co-founded by Marc Lore, who serves as its chairman and CEO. Lore is an e-commerce veteran, having sold his previous online retailing venture, Quidsi Inc. (the parent company of Diapers.com, Soap.com and BeautyBar.com) to Amazon in 2010.

Jet.com has a unique approach to pricing. Products on the site start with what the company says is an everyday low price, but once a consumer adds an item to their shopping cart, they can get special deals on other items (marked with a tag icon) that can be packed and shipped from the same facility. “It costs us less to ship multiple items together,” the company’s web site explains, “so when you add items with the tag to your cart, you pay less.”

The Wall Street Journal article estimated that Jet.com could be worth as much as $3 billion.

Walmart has been investing heavily in its e-commerce business, and has sought to leverage its bricks-and-mortar stores and its extensive network of distribution centers to compete with Amazon.com and other online retailers.

“As competition in the online space continues to accelerate, it is not surprising that a firmly established brick and mortar retailer would look to partner with Jet.com,” said Traci Gregorski, senior vice president of marketing at Market Track, a leading provider of market intelligence solutions. “They are disrupting the already volatile eCommerce space by providing a different model for pricing, and putting competitive pressure on the likes of Amazon and other eRetailers.

“Consumers are extremely cost conscious, and the ease and frequency with which shoppers are comparing prices online introduces heightened competitive pressure. Jet.com’s model of providing discounts based on cart size are game changing in that it in many cases means they will win on price in a head to head comparison. It makes sense that they would be an attractive partner to traditional retailers in order to offer scale and acceleration of their digital capabilities.”