NEW YORK — It’s been less than a year since Marc Lore sold his Jet.com e-commerce site to Wal-Mart Stores Inc. for $3.3 billion and subsequently was named president and chief executive officer of Wal-Mart’s e-commerce arm, but he’s already left his mark on the world’s largest retailer.
Since joining the world’s largest retailer, Lore has helped Wal-Mart acquire online fashion retailer Modcloth, whose price was not disclosed; paid $70 million for Shoebuy, whose name has been changed to Shoes.com, and spent $51 million to buy Moosejaw, an apparel and shoe site with an outdoor focus. There have been persistent reports that Lore is on the verge of acquiring Bonobos, but speaking at Wednesday’s Bloomberg Breakaway summit here, Bloomberg’s senior executive editor of global technology Brad Stone suggested that the Bonobos deal is done. Lore said quietly under his breath, “We haven’t bought Bonobos.” “OK, you can’t talk about it yet,” Stone said.
Asked about Amazon’s recent closure of Quidsi, an e-commerce site founded by Lore, he said, “Amazon would not get Quidsi to profitability.” Was Amazon undermining Lore’s credibility? Does Lore think the decision to shutter Quidsi was personal? “I didn’t think about it,” Lore said. “The business we built there was very much focused on assortments — diapers, dog food and everyday essentials — and in order to make the math work you have to build out the long tail. After I left Amazon, they stopped [investing in Quidsi]. I think that was not a smart strategic move.
“Doug [McMillon, president and ceo of Wal-Mart Stores Inc.] and the Wal-Mart board of directors empowered me and the team,” Lore said. “They gave us the keys and said, ‘We want you to run the business.’”
Lore, who joined Amazon following the Quidsi acquisition, said, “We felt we knew the baby market really well. It would have felt different if they had said, ‘You know baby, so why don’t you run baby for the entire organization.’ They said, ‘Keep doing what you’re doing and don’t get in our way.’
“When we bought Hayneedle and the other e-commerce sites, we asked the ceo’s of these businesses to run the category across the entire organization, including walmart.com and Jet.com, so Mike Sorbello, [ceo of Shoes.com,] runs shoes on Jet and Walmart. Anyone dealing with shoes now reports into Mike. It’s a different philosophy. It’s about empowering people.”
The support from Wal-Mart’s top management allowed Lore to build start-up incubator Store No. 8, named after a store “Sam Walton went to when he used to innovate. We’re not a tech company. The start-ups are fenced from the organization. We hired Jenny [Fleiss, cofounder of Rent the Runway] to run the first start-up brand Code Eight. We’ll focus on the next generation of merchandising and retailing. We’ll focus on how to out-merchandise the competition in the next five years.”
Lore said before moving forward with futuristic technology, “You have to nail one-to-one personalization. You have to merge the showroom floor with service you’d expect from a specialty store.” A trusted relationship facilitator such as a bot will ask questions as if it knows you as well as your parents do while overlaying a high degree of product expertise, he said.
Virtual Reality is also high on Lore’s list of technologies that will be widely adapted by consumers. “You put on VR glasses and say, ‘I want to go camping’ and you’re transported to a camp site,” he said. “Then you see a tent. You can ask, ‘Why is this more expensive than that tent?’”
Commenting on the woes of stores, Lore said, “You’d think the retail industry is on life support. Most retail is fairly healthy and growing in aggregate. Those that adapt will flourish, and those that don’t, won’t.”
Asked if there’s a chance of more store deaths, Lore said, “definitely, not maybe. It’s not easy to change and adapt. Things are moving really fast. You have to stay on top of it and ahead of it.”
Jet.com is in its infancy. “We’re off to a great start,” Lore said. “In the first 12 months, we hit $1 billion on the top line and are on our way toward getting to scale. As a mass merchant to make the numbers work, you need $20 billion-plus in top line to leverage sales and get to scale.”
Lore is working on bringing Jet’s technology to walmart.com. “The idea is built around a smart cart. The technology enables us to pull costs out of the delivery. As customers build baskets, we look at the baskets at checkout and based on the known inventory pools and third-party sellers, decide the most efficient way to get those products to the consumer.”
Wal-Mart’s online Easy Reorder starts when a customer is shopping in a store. “You’ll see products repopulate in your app once you check out,” Lore said. Shoppers can then enroll in the reorder system. Asked if e-commerce is cannibalizing sales from stores, Lore said, “We’re not looking at pieces of the business. We see that when the customer shops in stores and online, she spends more money.”
Jet and Wal-Mart are leveraging the retailer’s network of 6,700 trucks in true omnichannel style, said Lore. “Our cost to ship an item to one of our stores is 75 cents. It’s $5 or $6 to ship something to a customer’s home,” he said. “We launched a pick-up-in-store discount. We’re saying, ‘If you want to shop smarter, you can save 5 percent.’ We’re not beating up the vendors, we’re cutting supply chain costs.”
“I imagine that’s been a big cultural shift at Wal-Mart, viewing stores and e-commerce as one business,” Stone said. “It definitely seems that that wasn’t the case before, but it’s definitely the case now,” Lore said.
Lore launched Jet.com as a decidedly un-Amazon workplace; in other words, kinder and friendlier. At Jet.com, Lore has no office or desk, preferring to roam as he pleased. He works off his mobile phone, keeping a laptop in his locker.
“It keeps things more fluid,” he said. “You don’t get bogged down in one place. I sit in different areas of the company and listen to things and hear things and talk to people. I use the laptop occasionally — about once every three weeks I’ll break it out.”