Ever since Walmart announced its planned acquisition of Jet.com, the online shopping platform headed by Quidsi founder and Amazon challenger Marc Lore, there’s been speculation over whether the physical retailer will actually be able to offer Amazon.com some healthy competition in the ecommerce sector.
However, despite the overall positive (though not fantastic) results of Walmart’s Q2 earnings report, released the 16th of this month, there remains a healthy amount of skepticism in the industry about anyone’s ability to topple Amazon from its throne.
“Amazon is quite dominant and will continue to be in the foreseeable future, because the resources they are putting into ecommerce and all of their other initiatives are formidable,” said vice president and principal analyst at Forrester Research Sucharita Mulpuru-Kodali. “Walmart has slowly been gaining some share in some ways, but it’s often two steps forward, one step back for them.”
Those familiar with Walmart’s quarterly earnings will have observed this pattern, as a favorable quarter is followed by a downturn, and repeat until exhausted.
Spending $3 billion on Marc Lore and co., however, is as good a plan as any to break the cycle, especially in the company’s ecommerce efforts, where they have lagged despite troves of physical resources.
In some ways its numerous retail storefronts are actually a hindrance, since, as Mulpuru-Kodali states, “the store is still such a big part of the overall pie that it’s difficult to invest heavily in the web.”
If Jet’s technology and Lore’s expertise revitalize Walmart’s online focus the way they potentially could, then this team-up might actually be a nice, refreshing challenge for Amazon, as it still remains the world leader in ecommerce, helped along by the steady growth of its Amazon Prime service.
Walmart’s acquisition of Lore’s latest ecommerce baby should close by the end of its 2017 fiscal year, meaning that we still have a long way to go in terms of seeing the actual results of the merge on Walmart’s revenue and growth in the ecommerce sector.
But that doesn’t mean speculating about it isn’t fun.
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