Walmart's Jet.com Is Getting A Makeover To Try To Win Over New York's Millennials


Walmart’s Jet.com, with a major brand makeover, plans to double down on grocery delivery and sell Nike on its site. (Photographer: Daniel Acker/Bloomberg)

Three years after it was founded and two years after Walmart bought it for $3.3 billion, Jet.com is getting a major facelift. It plans to focus squarely on markets that 

Walmart
hasn’t been able to nail: urban areas like New York with high concentrations of affluent millennials, retailers’ coveted demographic.

In a major rebranding move that Jet.com described as an effort to “rehumanize” e-commerce, consumers in New York visiting the site beginning Thursday will see localized images and messages on the Jet.com homepage and throughout the site. The feature showcasing content based on where consumers are located will be rolled out to other cities, Jet.com said.

It will also personalize and curate product assortments and recommendations based on consumers’ preferences or the kind of apartments they live in, for instance. Editorial content will be a new focus alongside some merchandise.

Just as online grocery has become a high-stakes retail battleground and a key driver behind Walmart.com’s own e-commerce growth, Hoboken, New Jersey-based Jet.com will use the fulfillment center it’s opening this fall in the Bronx to double down on that category to speed up delivery.

What does that mean? Jet.com, which had been offering only two-day free shipping, will allow most New York customers to schedule three-hour windows for same-day or next-day delivery. Parcel, the same-day delivery startup Walmart bought last year, will service that demand exclusively. Products from local merchants and brands will be featured, and Jet.com plans to offer same-day or next-day delivery of local and craft beer in New York.

“The world is accustomed to e-commerce becoming a transactional place,” Simon Belsham, a former Tesco and Ocado grocery retail executive who was named Jet.com’s president in March, said in an interview. “We feel we have an opportunity to be different. … The most important experience in your life is around food. We want to bring that experience together with a unique assortment of general merchandise and home and electronics items in a single checkout and single cart. I don’t think anybody else is doing that.”

Jet.com’s relaunched site shows how many times customers have ordered an item to help them with reordering.Jet.com

Count Apple and Nike products among the “unique” merchandise that Belsham sees shoppers putting in the same shopping cart as their daily grocery items. While Apple products are already featured on Jet.com, the site will begin selling “a curated” collection of Nike and Converse shoes, apparel and accessories beginning in October in what Belsham described as a “strategic partnership” between the two, aiming to give consumers a special “brand experience.” Nike, which now also sells on Amazon, doesn’t sell on Walmart.com. It remains to be seen how different Nike’s assortment on Jet.com will be from that on Amazon.

Jet.com’s relaunch comes as studies show its traffic and market share have declined. A Hitwise study showed that Jet.com’s traffic dropped 56% in August from August 2016, when Walmart agreed to buy the startup co-founded by Marc Lore, who now heads Walmart U.S.’s e-commerce operation. In contrast, Walmart.com’s traffic jumped 37%, and Amazon’s rose 22% over the same period. Target’s traffic also rose during the same period, Hitwise data shows.

In the 12 months through August, Jet.com’s traffic — totaling less than 1% of Amazon’s and less than 5% of Walmart’s — also declined while Walmart, Amazon and Target saw gains, according to Hitwise.

Meanwhile, Jet.com’s U.S. online retail market share dipped to 0.1% in Q2 this year, from 0.2% in Q2 2016, while Walmart.com’s share edged up to 1.8%, from 1.2%, over the same period, according to a Rakuten Intelligence study of online receipts from a sample of more than three million U.S. online shoppers. No. 1 Amazon’s share climbed to 33.3%, from 30.7%, over the same period.

To be fair, Jet.com’s decline may reflect a deliberate move on Walmart’s part to reduce the marketing investment behind the brand known for a purple delivery box.

“The Jet brand over-indexed with higher-income, urban, millennial customers when we made the acquisition, and we intend to build on that strength going forward,” Doug McMillon, Walmart’s president and CEO, said in an earnings conference call in February. “The cost to acquire a new customer on a nationwide basis is cheaper with the Walmart brand, so we’ve been investing more in Walmart.com on a national basis and reducing marketing investment in Jet, except in certain urban markets.”

McMillon said at the time that Jet would not grow as quickly as it did in its early days but that it would be “well positioned” where Walmart has “chosen to focus the brand.”

“There’s a continued effort to continue to differentiate” Jet.com from Walmart.com, David Echegoyen, Jet.com’s chief customer officer, said in the interview with Belsham. “How do we complement each other best? Jet.com is tailored to city living. If you live in a city, we want to serve you. There’s a certain affluent level. We are focused on cities and urban areas, and that’s what you’ll see.”

He said that in Jet.com’s major Northeast market, including the “significant New York business, traffic and other measures have continued to be positive.

One of Jet.com’s new ads features an image pairing Bose headphones with dish sponges.Jet.com

As part of the rebranding, Jet.com is unveiling its biggest marketing campaign on TV, radio, online and social media, beginning Thursday in New York, Boston, Philadelphia and Washington, D.C. It will also advertise on billboards, subways and bus stops with such images as Bose headphones paired with dish sponges and a sequin dress alongside fresh beef burger patties.

“It’s really showing what people are buying in the carts,” Belsham told me. “The opportunity we have is to create a different (online shopping) experience. … The biggest challenge is to raise awareness.”

Throw in this other challenge, too: convince fickle urbanites with myriad shopping options and those already hooked within Amazon Prime’s ecosystem that Jet.com is the cool new kid in town they should open their wallets for instead.

Related on Forbes: Under Amazon, Whole Foods’ prices have barely budged, study finds

Related on Forbes: Walmart’s e-commerce tactics against Amazon look to be paying off

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