Walmart took over Jet.com in August 2016 to serve their existing customers in an effective manner and increase their new customer base through Jet.com. Jet.com was an online e-commerce company purchased by Walmart for $3.3 billion. A new marketing strategy initiated by Walmart expects their customers to order online but come and pick up their products from the store at a discounted shipping cost. Shipping cost is one of the expensive operational costs which are difficult to curb and eradicate completely. In order to reduce this shipping cost and provide the products at a cheaper cost, Walmart came up with this plan.
The market has been tough for Walmart due to cut-throat competition from their rival online e-commerce player, Amazon.com. The new marketing strategy would be initiated from next week through which there would be discounts available to the customers ranging from 5 percent to 50 percent. After ordering the goods online, the customer can collect the goods from the nearest Walmart store. The trial experimentation of this strategy would include 10,000 odd products and slowly and gradually the list would extend towards including more than one million types of products.
Marc Lore was assigned with the task to provide similar supervision and expertise that helped Jet.com to sake the e-commerce industry with their unique marketing strategies. At Jet.com, Marc Lore came up with a unique “smart card” discount card, which would provide more discount when you purchase more goods online. After Walmart acquired Jet.com, the sales revenue increased by 29 percent during the quarter, thereby giving a rise to the online business of Walmart.
The CEO of Walmart’s U.S. e-commerce business Marc Lore states that it would be cheaper to ship large volumes to the stores than individually to the customers. This would reduce the distribution cost to a large extent due to bulk transportation to single location. Additionally, this marketing strategy, if successful, then will provide an edge to Walmart over its online rival company. Walmart is struggling hard to survive in the market after the development of the new online market competitors and by acquiring companies like Jet.com, ShoeBuy, Modcloth and Moosejaw, Walmart is trying hard to highlight itself. The trial experiment would start from April, 19th with more than 4,000 stores inclusive in the strategy.
Walmart is making efforts to collaborate their online business with their retail outlets so that they could merge their expense and increase their profits.