LAS VEGAS — Marc Lore, president and chief executive officer of Walmart’s U.S. e-commerce division, is not going anywhere — in fact, he’s getting ready to buy.
His status had been the subject of some speculation after the big-box chain’s fourth-quarter earnings report showed e-commerce growth slowing to 23 percent. Recode editor Jason Del Rey faced the topic head on, opening his Shoptalk session on Tuesday with the touchy subject.
Lore, founder of Jet.com, joined the Walmart ranks when the retail giant bought his start-up for $3 billion in 2016, an arrangement that would lock the executive into a five-year deal. As recently as last December, he was considered an e-commerce wizard, the expert who would transform Walmart into a worthy competitor for Amazon — and who seemed to be doing it with a series of acquisitions and other strategies. Three months later, there’s talk of whether he’ll stay put.
Not only is he sticking around, but as he told it, the results played out as Walmart expected.
“That Q4 was largely planned,” Lore said. “We were attempting to create a healthy Q4; we told [Wall] Street back in October that we’d do $11.5 billion in the year. That’s exactly what we did.” He added that the company projected it would “do approximately 40 percent growth this year.…It was overdone — we planned it a year ago.”
Planning is one thing; messaging is another. “We felt that we should be thinking more about the year than the quarter,” he continued. “And we thought that reiterating 40 percent growth next year would be enough. It obviously wasn’t. But I think, as we deliver…things will correct.”
When asked whether he’ll be at Walmart a year from now, Lore said, “I absolutely will. I’m committed to the five years with the company and, if things go really well, who knows, maybe beyond that as well.…I feel like it’s still early days. It’s only been 18 months now since the acquisition.”
Indeed — Jet.com wasn’t the only high-profile acquisition in recent years.
Andy Dunn, founder and ceo of Bonobos, joined the fold last year and now sits as Walmart’s senior vice president of digital consumer brands, which include ModCloth, Bonobos and others.
Walmart’s mergers and acquisitions strategy aims to bring content and brands into the retailer’s universe, allowing the company to dig into digital-first businesses and reach new targets, like urban Millennials. Dunn explained the approach by using the Netflix model.
“About five or six years ago, [Netflix] had ‘Orange is the New Black,’ they had ‘House of Cards.’ People were like, ‘What are they doing?’” he said. “Are they trying to be like HBO? And I read a stat recently that this year, over half of Netflix’s streaming content was going to be magical, proprietary franchises. And that’s how we think about Bonobos, that’s how we think about ModCloth.”
The word “magical” came up a few times during the course of the session, which is a little strange, considering Walmart’s known more for discounts and logistical efficiencies. Not exactly magical concepts. The e-commerce wizard chimed in.
“There are two parts to the M&A strategy, primarily,” Lore said. “The first is buying specialty retailers that could help us get the fundamentals right on both Walmart and Jet.” The other, he said, was picking up brands that have a deep well of content, vendor relationships and merchandising expertise in what he calls “long-tail categories.”
The company hasn’t acquired any companies in the past few months, which prompted questions of whether Walmart’s spending spree on startups is slowing down. But that’s not from lack of desire, Lore said.
“We’re looking at and talking to more companies now than we ever had,” he explained. “So we’re definitely in acquisition mode…we just haven’t found the right ones yet.”
For Dunn, it’s all part of a larger strategy. When Bonobos became part of the Walmart family, it was to go on the offense in digital retail, and Walmart’s backing and back-end helped energize that play. For the giant, such deals illustrate its thinking and how it plans to compete with Amazon.
“You need a reason for people to come. You need that fundamental baseline experience, [and it] has to be good,” Dunn said. “Let’s have magical brands that are really, really special, and give people a draw.”