Wal-Mart Tries to Take Jet.com Upscale
September 28 2017 - 7:04PM
Dow Jones News
By Sarah Nassauer
One year after Wal-Mart Stores Inc. bought Jet.com for $3.3
billion, shoppers will get a glimpse of how it hopes to use the
startup to battle Amazon.com Inc.
Jet plans to start selling apparel from niche online sellers
that Wal-Mart has acquired over the past year, according to people
familiar with the matter. It is expected to add clothes from
ModCloth in coming months and Bonobos men's apparel next year, one
person said.
Ahead of the winter holidays, the website also plans to
introduce a new line of private-label food and other grocery items,
according to people familiar with those plans.
The moves are part of a broader effort by Wal-Mart U.S.
e-commerce head Marc Lore to offer shoppers specialty goods that
can't be bought elsewhere and to differentiate Jet from its parent
brand. They also shift Jet, which launched in 2015, away from its
roots as a discount retailer.
Jet will start selling around 60 food and household products
over the next two months, later adding baby, beauty and pet
products that aim to give shoppers a more premium option than
Wal-Mart's existing store-brand selection, said one of these
people. The items will use shipping-friendly packaging, not
packaging designed for products sold primarily from store
shelves.
A spokeswoman for Jet confirmed that a line of private-brand
products called Uniquely J would be released, designed with the
"metro millennial consumer" in mind, but wouldn't discuss further
details.
The Hoboken, N.J.-based unit is also developing a bed-in-a-box
brand, said another person familiar with the plans, similar to the
compressed mattresses touted by a growing group of startups. The
mattresses are mainly sold online and shipped to consumer's
homes.
Wal-Mart announced Wednesday it would expand its baby brand
Parent's Choice, adding bedding, baby food and a stainless steel
sippy cup.
Amazon is boosting its private-brand selection as well. After it
acquired Whole Foods, it quickly added the grocer's store brand,
365, to its online offerings.
Private brands don't shoulder marketing expenses, which means
they produce higher profits that can help offset the cost of
shipping orders to shoppers' homes, said Jeff Gamsey, vice
president of private brands for Boxed.com, an e-commerce company
that ships bulk goods. In its first years, Boxed developed its
Prince & Spring private label, starting with paper towels and
toilet paper. It now sells about 65 products under the brand, he
said.
As Jet embraces private and specialty brands, it has pulled back
on some costly experiments, like delivering fresh food to homes. In
recent months, Jet's fresh-food delivery service has been scaled
back and dropped from areas like Fort Bragg, N.C., while remaining
in large urban centers like New York City.
--Telis Demos contributed to this article.
(END) Dow Jones Newswires
September 28, 2017 18:49 ET (22:49 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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