What you need to know about Walmart’s e-commerce acquisition spree

Meanwhile, Walmart is acquiring knowledge, as each new e-commerce acquisition brings new talent on board with startup mentality and bravado that can accelerate learning and decision-making. “I’d argue that Lore is making decisions with more speed and decisiveness than your ‘homegrown’ Walmart executive would traditionally make,” said Cusson.

Wells Davis, chief strategy officer for agency David&Goliath, also said Wall Street rewards Walmart’s strategy, as the company sees an immediate return on those investments. “It would be very expensive for Walmart if it just invests in its in-store experiences, and it would take a long time for the company to see the results,” said Davis.

But brick-and-mortar stores are still Walmart’s major focus. As Doug McMillon, CEO for Walmart, described in the earnings call in May, while those acquisitions have received a lot of attention, the company’s plan in e-commerce is not to buy its way to success. “The majority of our growth is and will be organic,” he said.

Would e-commerce acquisitions help Walmart compete with Amazon?
Yes, at least from a search perspective. Most retail purchases — even if they take place in store — started with online searches that Amazon typically owns. So acquiring more e-commerce retailers is a game of trying to win consumers’ online searches, said Cusson.

“We know that Amazon is currently capturing much of that traffic, so if Walmart can introduce a great number of opportunities to be found, it will help in its battle with Amazon,” he said.

Davis also believes that e-commerce startups can help Walmart become a more upscale brand and offer shoppers more customized experiences.

But it’s still too early to tell how successful Walmart can be with those acquisitions. After all, driving the lowest price is still a core value of Walmart, but that is not the foundation of the e-commerce brands Walmart has purchased. And company culture could be a big challenge. For instance, Walmart reportedly doesn’t allow in-office drinking, so Jet.com had to move its regular Thursday evening happy hour out of the office.

“Some of those brands are favored by niche consumers. But when Walmart puts its hand on them, it bends their customer loyalty,” said Cusson. “There is a real possibility that some of these acquisitions may disappear within five years. But with no risk comes no reward.”