Last year Walmart bought jet.com. Did you know that?
It's now apparent that they have decided to support both
brands. As the company has explained,
jet.com is an urban Millennial brand and Walmart has not made any inroads with
that target on their own. (Green, 2017)
While Walmart is experimenting with online ordering and
customer pick-ups, jet.com is chasing wealthier shoppers and launching a
private label brand called Uniquely J.
(Corkery, 2017)
It sounds interesting.
But I am reminded of a Director of Marketing at Uncle Ben's who told me
that long term she couldn't afford to support multiple brands so they would all
need to live under the corporate umbrella.
So what are the pros and cons of having two different
brands? If Millennials don't like your
brand, should you buy one that they do like?
Can you reach out to different targets without appearing
inauthentic?
Would you use jet.com if
you knew they were owned by Walmart? Do
you think the different brands appeal to different personality types? Different business styles?
Green,
D. (2017, September 29) How Walmart
turned its $3.3 billion acquisition of Jet.com into its greatest weapon against
Amazon. businessinsider.com. Retrieved October 17, 2017, from
Corkery, M. (2017, October 6) Shopping Without Schlepping. The New
York Times. p B1.
8 comments:
Hi class!
It is news to me that Walmart owns jet.com. To be honest, I have never actually used jet.com. It seems to parallel Amazon, so why not just use Amazon?
Instead of buying jet.com to target Millennials, Walmart could have considered rebranding itself:
1. My first thought is a name change. In my opinion, the name Walmart comes with a negative connotation.
2. The new name and its logo must be strategically selected. Perhaps this means hiring business consultants, who can help in the name and logo selection.
3. Walmart could redesign its website. The website must be more user friendly, and it should also target the Millennial generation in its design.
4. The company must progressively renovate its stores.
Overall, I do not think it is necessary for Walmart to own two companies. Instead, the company could simply rebrand itself.
Would love to hear your thoughts!
Best,
Grace Napolitano
The cons of having two different brands is that there could be a confusion in the way the different brands market their different segment. The strategies used could be mix together. However, Jett has done a good job in this because there is a clear differentiation on whom they want to target and how they do it. From the packaging, the presentation of the website, to the products that the companies advertise the brands show clear differences and its own authenticity. For that reason many of us had never thought of Jeff.com as being part of Wal-Mart. Marketers have taken two very different approaches. Jeff.com has focused on the millennial generation while Wal-Mart has made continuous efforts to enter into the “mass market appeal”(Green,2017). Nowadays the e-commerce has become an indispensable weapon for businesses. There is a huge market out there that Jett.com is going after, and that has already proven to be a threat to Amazon Inc.
http://www.businessinsider.com/walmarts-jet-brand-strategy
Hello class,
I knew that Walmart bought jet.com from my finance class and I think different brands can appeal to different personality types and different business styles. I think everyone knows about H&M, a clothing-retail company known for its fast-fashion clothing. But do you know that “&other stories” is another brand of H&M. And do you also know that COS is also another brand of H&M. These three brands target different markets and it seems like they are doing quite good. I think Walmart’s situation of having 2 brands is very similar with H&M group and I think it shouldn’t be a bad idea.
This case actually indicates the debate between the pros and cons of acquisition. For the time being, the cons of the acquisition would be that Walmart and Jet.com are fulfilling what they need from each other. Walmart wants to achieve greater market share and higher profit growth through reaching out new customer demographic, which is urban millennials while Jet.com wants to compete against Amazon by drawing support from Walmart. If it is a friendly acquisition, which means that if they both work toward their mutual benefits and stick to the agreement, they will likely achieve their respective goal; however, it is a hostile acquisition vice versa. The cons will be shown such as overuse of control, turbulence between different workforce cultures, complicated management.
I think it is a workable strategy for two reasons. Firstly, it is not worthwhile to reimage Walmart because otherwise it might lose its main market segment which earns 80% of the revenue stream. However, to find higher growth and new profits, it is smart that Walmart looks for a promising young company like jet.com to acquire and incorporate into its revenue stream. Secondly, it is quite common for a big company to acquire smaller but promising companies, so I don’t think it is unauthentic. In order to reach different targets that possess different consumer shopping patterns and personalities, it reduces so much cost to acquire a brand that already has the customer base.
It is a bit true that I don’t want my likable brand is associated with an unlikable brand. However, I don’t really mind as long as I get the product that I want. The product matters the most to me as a consumer regardless what company it is acquired to.
It is an interesting business idea and definitely makes sense for Walmart. I remember hearing about this. My older sister used jet.com for a little while and then decided to start using amazon since their delivery was faster. I think that if people knew that jet.com was owned by Walmart they might be less inclined to use it since Walmarts brand identity is different than what they are trying to get across with jet.com. Charlene (above comment) makes an interesting point with H&M group and &other stories. This happens a lot now since brands want to tap into different markets. When I found out & other stories was owned by H&M I stopped shopping there because I felt I’d just shop at H&M for the better prices and same manufacturing.
Hi classes,
In my opinion, I think it doesn’t work for Walmart. Walmart is known for cheap and affordable goods. They are targeting low-income people. The people who willing to shop in Walmart won’t be able to afford expensive products. However, Jet.com is targeting wealthier shoppers. In my opinion, if a person is rich enough, they don’t want to buy merchandise under Walmart company. They will choose more high end company to buy goods. Besides, it’s hard to maintain two different brands, especially they have totally different market segmentations.
jinjin lu
I believe Walmart was wise to keep Jet.com's individual brand identity in tact, and not overtly mention that they are now a subsidiary. Walmart holds an iconic place in American retail lore and to overhaul their entire brand cache might alienate their longtime customers who stretch back many decades. These customers typically enjoy a more conservative, sedate shopping experience. Appealing to Millennials under separate cover is wise, as they can try experimental tactics using social media powered Influencers and other provocative techniques. The only con I can think of is the considerable budgetary/resource investment needed to segment their customers and create (coherent) separate identities.
Hi class,
I think this is a valuable combination for those two brands.
Walmart is a juggernut retailer but it seems they suffer pressure from e-business. It's hard to be talked about with Amazon. Amazon has taken more than half market share in e-business. Jet is a new brand, but it attract amount of customers according to their new way of pricing. Jet said they can offer variety discount according to your address or order amount, which means more items more discount. I used Amazon Prime service before, they can make sure the order will arrived very soon. It is hard to say which one is better, I would chose depends on my situation. If I am not that worried, I would chose jet for cheaper price. I would chose Amazon to save my time when I need something imediately. So I think Walmart buy Jet.com cannot defeat Amazon, but it is a good way to balance the e-business market.
Just like Charlene said, H&M has different brands targets different markets. After Walmart buy Jet.com, Walmart can both develop its retail market and e-business market.
Shixiong Yang
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