LAS VEGAS — Autonomy for the acquired seems to be just the trick for Wal-Mart Stores Inc., especially with the retailer on an e-commerce acquisition roll.
Marc Lore, the founder of Walmart’s Jet.com and now president and chief executive officer of Walmart e-commerce U.S., said empowerment to the management teams of those acquired by the company more recently has turned out well for all.
Lore was one of a number of executives who delivered keynotes Monday at the second annual Shoptalk conference taking place in Vegas. The four-day event is expected to draw more than 5,000 attendees from retail, tech and finance.
“We were able to build a lot of trust early on with the [Walmart] ceo Doug McMillon,” Lore said during his talk. “It was really about empowering people and Doug and the board made a big move I think to empower me and the rest of the team and I think that really got us fired up.”
Walmart’s been on an e-commerce tear since its $3.3 billion acquisition of Jet, which closed in September. Walmart at the end of last year paid $70 million for footwear online retailer ShoeBuy and in February said it was paying $51 million to acquire outdoor e-tailer Moosejaw. The company’s latest buy, confirmed this month, is the online vintage-inspired ModCloth brand, best known for its dresses.
Lore went back to last year when the decision was made to sell Jet to Walmart, going through what he weighed in making the decision.
“As an entrepreneur, you’re selling pieces of the business along the way to venture capitalists and, you know, a founder at the end of the day is lucky to have 10 to 20 percent ownership,” Lore said. “What does it mean to really sell a company? I think it’s really about did you sell the vision.”
Walmart’s promise to Lore was that they’d have the backing of a much larger business that would remain hands off in its approach. In return, these smaller brands can now sell and gain visibility on much larger platforms.
“So suddenly what was a certain size business now, overnight, becomes that much bigger,” Lore said, before going back to the idea of empowerment as the differentiator to what makes an acquisition after a deal closes successful.
That similar approach to independence will be taken with an incubator for start-ups in the retail technology space, called Store No. 8, which Lore unveiled at the conference. These early-stage companies will have the help of Walmart to test and innovate—something that’s not necessarily afforded to Jet and the rest of the team that’s focused on producing results in the short term. With Store No. 8, “there’s not a focus on today; they can think bigger,” Lore said.
The first business to join Store No. 8 is expected to be revealed in the near future, Lore said.
With Walmart’s e-commerce division the focus will continue to be—as seen with the most recent acquisitions—on brands that allow Walmart to offer more curated experiences that give it better margins, Lore said. There’s big potential in fashion and accessories where the margins are larger than commodity-oriented businesses, he added.
Lore, when asked if the future acquisition strategy would ever consider a more legacy brand in the e-commerce space such as a Stitch Fix or Rent the Runway, the executive appeared open to the idea: “I definitely would [consider it] if they were prepared to make the bold move of handing over the keys. You’ve got to hand over the keys…. That’s tough to do, but I think it would work.”
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