Four years ago, Walmart made a pricey bet on its e-commerce future. It paid $3.3 billion to buy Jet.com, an e-commerce startup that it hoped would attract younger, affluent, and city-dwelling customers and help it fend off Amazon’s rapid rise.
On Tuesday, Walmart announced it will discontinue Jet.com and phase out the brand.
Walmart CEO Doug McMillon said the company gained more than a name. On a call with analysts, he credited the acquisition for “jump-starting the progress we have made the last few years.” He pointed to Walmart’s curbside pickup, delivery to the home and expansion of categories beyond groceries, such as apparel and home decor.
Walmart’s e-commerce business has yet to turn a profit. It’s still trying to broaden its online sales beyond grocery. And Amazon has continued to be a tough rival.
Some initiatives have been costly flops. It bought, but then sold women’s apparel company, ModCloth. It shut down Jetblack, a high-end personal shopping service that catered to affluent families in New York City, in February. Through the members-only service, customers could order items by text, whether a bottle of champagne or box of diapers, and have them delivered on-demand. It was launched in 2018 and initially led by Rent the Runway co-founder Jenny Fleiss.
In the years since Walmart bought Jet.com, it’s bought other digital natives, such as menswear company Bonobos, and birthed others like mattress brand, Allswell. It’s grown its curbside pickup and home delivery business. And it’s launched new online offerings, including Express Delivery, a new store-to-door service that delivers to customers’ homes in less than two hours.
Those investments have paid off as e-commerce growth. Last year, e-commerce sales grew by 37%. During the coronavirus pandemic, they shot up by 74% in the first quarter and attracted customers who tried its online services for the first time.