BENTONVILLE, Ark. (KNWA-KFTA) — Retail giant Walmart discontinued its e-commerce marketplace Jet.com.
The announcement was rolled into the company’s Tuesday, May 19, quarterly report.
“Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com. The acquisition
of Jet.com nearly four years ago was critical to accelerating our omni strategy.“ — Walmart
Walmart acquired the Hoboken, New Jersey company in August 2016 for about $3 billion in cash.
NO JOBS LOST WITH JET.COM CLOSURE
Most of the jobs at Jet.com had already been integrated into Walmart’s eCommerce business in 2019, according to Walmart. No associates were displaced as a result of the closure. As for Chief Executive Officer Marc Lore, he will continue with the company.
“Our resources, people and financial, have been dominated by the Walmart brand because it has so much traction. We’re seeing the Walmart brand resonate regardless of income, geography or age. The Jet acquisition was critical to jump starting the progress we’ve made the last few years. Not only have we picked up traction with online grocery, but our Walmart.com non-food eCommerce growth accelerated after the arrival of Marc and the Jet team. He leaned into the Walmart brand quickly,” said CEO Doug McMillon.
WALMART Q1 REPORT
Walmart U.S. announced a 10% sales growth and eCommerce sales increase of 74%. The earnings report stated, “total revenue was $134.6 billion, an increase of $10.7 billion, or 8.6%.” However, Walmart stated, “The company’s net sales and operating results were significantly affected by the outbreak of COVID-19.”
Walmart’s Chief Financial Officer Brett Biggs said product demand shows positive sales growth, but there are other incremental costs the company incurred. For example, such as paying higher wages and benefits, safety and sanitation brought on by COVID-19. As a result, Walmart is withdrawing financial guidance for fiscal year 2021.
“The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including: the duration and intensity of the COVID-19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence,” said Biggs. “Our business fundamentals are strong, and our financial position is excellent. Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in most any environment. While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly omni world.”
Doug McMillon President and CEO, Walmart Q1 statement:
“More than ever, the news this quarter is our
amazing associates. They are rising to the
challenge to serve our customers and our
communities. I’m proud of how they’re adapting
and performing. Our omnichannel strategy,
enabling customers to shop in seamless, flexible
ways, is built for serving the needs of customers
during this crisis and in the future.”
WHAT IS OMNI WORLD, OMNI-CHANNEL STRATEGY?
This is a retail integration strategy to allow consumers to shop seamlessly through a mobile device, online, or in the store. For example, Walmart has grocery pickup services and there are customers who prefer to shop in stores.