Walmart has called “time’s up” on Jet.com roughly three years since acquiring the e-commerce startup and the service founder Marc Lore for $3.3 billion. Walmart has tried to figure out the best play for Jet.com and last year said the business would focus on densely populated urban markets like New York City and San Francisco.
The Bentonville-based retailer moved Wednesday (June 12) to begin integrating the two businesses into one. Jet.com will continue to operate, but will be managed by Walmart.com. The direction of Jet.com will likely change as CEO Simon Belsham is exiting the company in early August. The Jet team will report to Kieran Shanahan, who will continue to oversee the Food, Consumables and Health and Wellness Categories for Walmart eCommerce.
Shanahan began his Walmart career with U.K.-based Asda, eventually leading all of its e-commerce operations. He joined Walmart eCommerce in 2014 and led the build out of the U.S. online grocery service before transitioning to merchandising roles within Walmart U.S.
“His experience and the relationships he brings from multiple areas of the business will be critical for the further integrated role Jet will play within our portfolio. This natural progression of integrating an acquisition allows us to fully leverage Walmart’s assets for Jet and leverage Jet’s talent for Walmart,” Lore noted in a blog post Wednesday about the transition.
He said some of the team of Jet and Walmart joined forces last year, but now the entire Jet business (retail, marketing, technology, analytics, product and back office) will be merged into Walmart.com.
“With the teams creating synergy and Jet becoming even more focused, we don’t have the same need for a dedicated leader, … Belsham will be supporting the Jet transition through early August. Simon has been critical in repositioning Jet to reach urban customers,” Lore noted. “His steadfast leadership, deep knowledge of the retail industry and passion for our associates and customers had a positive impact on our organization. I can’t thank him enough for all he has done and appreciate his leadership and contributions.”
Part of the benefit for Walmart owning Jet was the ability to get more brands that would not be comfortable selling under Walmart. No one from Jet.com was present to talk to the media at this year’s shareholder week, unlike last year when Belsham and his management team held a question and answer session with the media. Lore told the media recently the Jet Black concierge service being tested in Manhattan is underway, but there is no plan to expand it.
Kantar reports Jet revenues have continued to fall well below forecasts. In 2016, the forecast for Jet revenue was $1 billion, but sales have fallen to roughly $689 million in 2019, Kantar reports. Households shopping Jet fell to 2% in January, from 3% a year ago. Insiders have said Jet.com has been on the backburner for Walmart, but with the recent Flipkart investment that continues to have a negative impact on earnings, the company is likely reeling in some of the line given to Jet.com in the past couple of years.
Walmart owns several native digital brands like Moosejaw, ModCloth, ShoeBuy, Bare Necessities and Eloquii that the company plans to continue growing, while the future of Jet.com remains uncertain.