While Walmart’s acquisitions of ModCloth, Jet, Bonobos appear like a game of catch up to the rest of the industry, Marc Lore, president and CEO of Walmart Ecommerce US, said there’s a bigger strategy at play.
Part of that plan is bringing together the knowledge of all these digitally native brands into the world of Walmart, shared Lore at Shoptalk, a retail conference held in Las Vegas.
“[We’re] trying to create a portfolio of these brands that give us proprietary content for a reason for [a] millennial to come shop inside the Walmart ecosystem,” Lore said “We’re not going out making billion dollar acquisitions. We’re buying companies that can help accelerate us to the fundamentals.”
Andy Dunn, founder and CEO of Bonobos and svp of digital consumer brands at Walmart, believes these acquisitions will let Walmart “play offense.”
“My view is everyone fighting in their own corner for the same things,” Dunn said. “The concept [of these acquisitions] is actually ‘lets cross pollinate talent, let’s cross pollinate learnings and lets have a common backbone and backend with the Walmart’s supply chain, operation infrastructure is going to be the backbone.’”
Walmart’s acquisitions are targeted to expand in specific categories, and if that’s not possible, the company will build internally instead, Dunn said.
The acquisitions are also helping Walmart build out its strategy for Jet.com, which Walmart acquired for more than $3 billion in 2016. Walmart also paid between $50 and $75 million for Modcloth and $310 million for Bonobos in 2017.
“With Jet, the digitally native brands really help make Jet a more attractive property,” Lore said.
Lore isn’t concerned about the success of Jet either. He thinks the company is “resonating with millennials” because of the company’s brand, voice and delivery speed. Lore also shared that the company recently realigned how Jet is trying to acquire more customers, by focusing on the urban millennial, rather than trying to attract customers in the middle of the country who have a higher lifetime cost to acquire.
The ecommerce president and CEO also assured the Shoptalk audience that he’s sticking around with Walmart for five years and that he’s not concerned about the company’s latest earnings report which caused the stock to drop more than 10 percent. He’s focused on the future of Walmart and what the company will do in 2018.
“We have 1,200 pickup locations now, we’re adding another 1,000 pickup locations by end of year [and] we will have 100 metro markets for same day delivery, which is 40 percent of the population that we will be able to get to same day,” Lore said.