This morning, Walmart announced a $3.3 billion dollar deal to acquire Jet.com—the highest price ever paid for an eCommerce company.
Jet.com has quickly become known for “Gamifying Shopping” with its pricing algorithm based on encouraging higher average order value baskets, while producing savings for their customers. However, currently less than 1/3rd of Jet.com’s orders are fulfilled from Jet.com’s warehouses. With Walmart and Jet.com teaming up, Walmart is able to leverage Jet.com’s pricing algorithm while Jet.com will leverage Walmart’s wide fulfillment network.
With this deal, Walmart discussed its intention to keep Jet.com as its own entity, but it is needless to say that there is going to be plenty of opportunity for data sharing across both unique companies. Strategically, Walmart keeping Jet.com separate from Walmart.com gives Walmart the advantage of using Jet.com as its innovation center and pushing successes to Walmart.com.
With this deal, Walmart is clearly positioning itself to give Amazon a run for its (well, your) money in the eComm space.