Jet.com Will Begin to Reap the Benefits of New Owner Wal-MartAlex Newman
Watch out! Jet.com’s customer base, mainly made up of brand-conscious millennial shoppers, and they will now reap the benefits of their new owner Wal-Mart, with in-house brands. This will include Value, Equate, and Sam’s Choice now that the fulfillment center have all been linked up. This is just the beginning of the $3.3 billion acquisition of Jet.com, to challenge the e-commerce leader, Amazon.
Wal-Mart and Jet.com will continue to run completely separate sites with two different target markets. Walmart.com will continue to focus on their everyday, price-sensitive shoppers and Jet for more modern, urban customers. Wal-Mart’s U.S. online revenue rose by double digits for a third consecutive quarter, as third parties selling on its Marketplace increased revenue by 36 percent in the fourth quarter (four times the revenue just a year earlier).
E-commerce still only accounts for about 3 percent of the Wal-Mart Inc. total revenue, compared to 11 percent for the retail industry as a whole. Wal-Mart store brands will help Jet.com. This will include food, beverage and health and beauty, which are all typically priced below national brands such as Nestle and Procter and Gamble Co. Since they are in-house brands they will not require any advertising, which in turn will help profit margins.
Some shoppers view store brands as independent brands. Where products that is popular, suppliers sometimes get letters from customers asking why they can’t buy certain brands at other retailers.