Marc Lore is staying put, and Walmart remains on the hunt for brands to fill out Jet’s stable of category-specific digital players.
Those were the headlines coming out of the Shoptalk conference on Tuesday.
Though some reports had Lore eyeing the exit after Walmart’s disappointing online growth in the fourth quarter, the head of the company’s e-commerce business in the U.S. told the crowd not to believe the rumors.
“I told Doug [McMillon, Walmart’s CEO] and the board when I joined Walmart I’m committed to five years, and if things go really well, maybe beyond that as well,” he said. “It’s still early days. It’s only been 18 months since the acquisition.”
But what about those Q4 results? Walmart went from 50 percent online sales growth in the previous quarter to 23 percent. That sudden deceleration spooked investors and brought the company’s e-commerce momentum into question.
Lore, who was joined on stage by Andy Dunn, founder of Bonobos and SVP of digital commerce brands at Walmart, said the story was “overdone.”
“Basically that Q4 was largely planned. We attempted to create a healthier Q4. We told The Street we’d do $11.5 billion in the year, and that’s what we did. We also said we’d have 40-percent growth this year and we recently reiterated that growth,” Lore said.
“We just took it as an opportunity to create a healthier Q4 business,” Lore said. “Some of the great deals that happen in store don’t translate just as well online because selling stuff at the prices we were invites a lot of resellers to come in, and we tried to clamp down on that and create a healthier business for our consumers.”
Beyond the company’s last quarter, many are still wondering where Walmart is headed with its new stable of brands that don’t seem to have much to do with what anyone traditionally thinks of when they think of Walmart.
To understand it, Dunn said, think about how Netflix has evolved.
The video content company started with a couple of breakout shows of its own a few years ago but few could have envisioned its rise to become a real player in content. The company is now on track to produce 50 percent of its streamed content by the end of 2018.
According to Dunn, Walmart is following suit.
“You need a reason for people to come,” he said. “That fundamental baseline experience has to be good… but a reason to come, we thought, would be let’s have magical brands that are really, really special and give people that draw that I’ll now come to this ecosystem.”
And that ecosystem includes Jet. Though Walmart recently announced it would be shifting some of its marketing dollars from Jet to Walmart, Lore said the move is strategic and not, a some had suggested, an indication that Walmart is losing interest in the company. The plan, he said, is to play to Jet’s strengths with millennials in urban areas and continue to grow Walmart elsewhere. And the digital brands will play a big part.
“We’ll continue to push the assortment. We’re working on a lot of premium partnerships right now that will augment and uplift the assortment and of course add Bonobos, Allswell [Walmart’s new bedding and mattress brand] and ModCloth to Jet as well,” Lore said.
However, Lore pointed out, “a handful of brands isn’t enough,” which is why Walmart remains on the lookout for additional companies to add to its stable.
“We’re looking and talking to more companies now than we ever have. We’re in acquisition mode,” Lore said, adding the company is just at the beginning. “We’re looking for the right opportunities.”
In addition to attracting the millennial shopper, Lore said the acquisitions are about quickly picking up merchandise expertise in specific categories.
In return, the brands get what independent startups don’t have.
“The concept is let’s cross pollinate talent. Let’s cross pollinate learnings and let’s have a common backbone and backend through Walmart’s supply chain infrastructure,” Dunn said. “This wasn’t about let’s figure out how to rip out costs. It’s about how to play offense.”