![](https://www.marketplace.org/wp-content/uploads/2016/08/GettyImages-72172414.jpg?w=720)
Jet.com would juice Wal-Mart’s online sales
![](https://www.marketplace.org/wp-content/uploads/2016/08/GettyImages-72172414.jpg?w=720)
Wal-Mart reported a higher than expected profit last quarter, but it’s no secret the company hasn’t been happy with its performance on the e-commerce front.
Reports say the retailer may be trying to change that by buying Jet.com, the upstart e-commerce platform set up as a rival to Amazon. But despite spending millions on tech and marketing, Jet.com is finding Amazon harder to take on than it thought.
Why would Wal-Mart take on Jet?
Well, Wal-Mart’s online sales have been ticking up, but not nearly as fast as Amazon’s. Brian Yarbrough is a retail analyst with Edward Jones. He said everyone in retail used to react to what Wal-Mart did – now, Wal-Mart is trying to keep up with Amazon. He said in short, buying Jet.com could mean more sales for Wal-Mart.
“The Jet.com customer is a bit higher income than your average Wal-Mart customer,” he said, “and I know Wal-Mart has talked about trying to move up the income scale, so it would give them an opportunity to maybe cater to a higher income customer.”
Larry Chiagouris is a professor of marketing at Pace University. He said if Wal-Mart buys Jet, it’s an admission that Wal-Mart couldn’t conquer online on its own. But he added if the two companies merge…they could.
“I think it’s going to be a formidable competitor to Amazon,” he said, “simply because Jet will benefit from the existing purchasing power Wal-Mart has, and the existing sophisticated logistics and supply chain management that Wal-Mart has.”
And Wal-Mart will benefit from Jet’s technology. Paula Rosenblum of RSR Research said the company’s algorithm determines the best price and shipping depending on where a product is shipping from.
“So they’ll give you all kinds of deals if you’re willing to take slower shipment, if you’re willing to deal with a different kind of return process,” she said.”It’s kind of cool actually, and it’s probably what I’ll call their secret sauce.”
If the deal goes through, Walmart will reportedly pay about $3 billion.
Correction: A previous version of this story misspelled Larry Chiagouris’ name. The text has been corrected.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.