, marc lore, wal-mart, amazon

Could help Wal-Mart compete with Amazon?

Wal-Mart just might want to find out.

According to a published report, the retail giant is considering buying the year-old e-commerce concept. A Wal-Mart spokeswoman said the company had “nothing to add at this time” and a representative for did not respond to multiple queries., which has been said to be worth as much as $1.35 billion, could potentially help Wal-Mart diversify its offering and better square off with Amazon.

All three companies have battled it out in the same ecosystem online, offering a breadth of items from cereal to purses as well as cheap and fast shipping.

“The two companies share a like-minded audience, in that they’re looking for price-savings and convenience,” said Glenn Lalich, vice president of research and analysis at PMX Agency, speaking of Wal-Mart and Jet. “They would also benefit from a somewhat elevated shopping experience in terms of product offering and personalization. brings a significant number of merchant relationships which may help to bolster Wal-Mart’s marketplace platform — this has been a key area of focus in Wal-Mart’s e-commerce push.”

If it did indeed buy, Wal-Mart would potentially gain an assortment that has expanded to include 2.7 million fashion items from brands such as Calvin Klein, Michael Kors and Kate Spade.’s chief customer officer Liza Landsman recently told WWD that the platform has 2,300 retail and brand partners — 400 of which are in the fashion category — and a total of 12 million stockkeeping units.

Landsman described’s model as a “hybrid marketplace” that serves four million customers from three warehouses, in addition to shipping directly from retail and brand partners. She said the average customer order is six to seven items.

It’s that marketplace model that some see as attractive to Wal-Mart.

Adrien Nussenbaum, U.S. chief executive officer and cofounder of retail tech firm Mirakl, said a Wal-Mart deal to buy would be “a clear endorsement of the marketplace model, where third-party sellers offer products on a retailer’s site. Amazon’s success with this model has put a ton of competitive pressure on Wal-Mart. Jet’s initial model was clunky, requiring membership fees a la Costco, but it pivoted quickly to the straightforward marketplace model and saw fast growth.”

It’s a model, though, that needs lots of cash and even more scale.’s raised more than $500 million and targeted revenues of $20 billion by 2020.

Wal-Mart could certainly bring scale, although, it’s less clear if other retailers would be so keen selling their goods through a platform run by the retail giant. (The latter is an issue the industry is grappling with as it sees Amazon as both competitor and connection to their customers.)

David Newman, who has previously worked in operations at companies such as Wal-Mart, Target and Apple, noted the investment in’s branding.

“Does Wal-Mart intend to operate under the Jet brand? Because Jet has put a ton of money into the marketing,” he said, noting a deal would have the company “going after a space that isn’t occupied by Wal-Mart today — the Amazon space, with a transparency model that would allow operational efficiency, procurement and pricing leadership.”

And Wal-Mart has also typically gone after smaller deals in tech.

Wal-Mart has lately been experimenting with new programs to court shoppers such as Wal-Mart Pay, a proprietary mobile payment app, and same-day, on-demand delivery through partners such as Uber, Lyft and Deliv.

In June, Wal-Mart global e-commerce and technology president and ceo Neil Ashe noted that a lot of the activity at had been related to the retailer’s own merchandise and said they had been expanding the assortment at

But Wal-Mart’s digital sales are not growing as fast as the industry and not nearly as fast as Amazon. According to Forrester analyst Adam Silverman, 60 percent of all e-commerce growth comes from Amazon.

Silverman said acquiring would “amplify” Wal-Mart’s e-commerce business since it’s estimated that is adding 350,000 subscribers monthly. Landsman said Jet had about four million customers, and in April, comScore estimated that in April, had 87 million unique users.

According to data from NPD Group’s Checkout Tracking, Wal-mart might find Jet’s customers to be attractive; they are more likely than other online buyers to have incomes more than $150,000, and only one-fifth of buyers had also purchased from in the most recent six-month period.

But while wins by having the lowest price, the company is keeping prices down and losing money in the process.  

“There are some questions whether is able to retain customers,” Silverman said. “If the majority of sales are coming from first-time buyers, as some firms have stated, then their model is reliant on heavy acquisition costs. The deal only makes sense to Wal-Mart if they can acquire new customers at a reasonable cost per acquisition.”