Walmart has acquired e-commerce pureplay ShoeBuy for $70 million in a bid to bolster inventory on Jet.com and help boost overall online sales growth, reports Recode.
While the acquisition has the potential to breathe new life in Jet.com's wavering performance, the marketplace's struggles with customer loyalty in the past could minimize ShoeBuy's contribution.
Jet.com's sales soared during the holidays, but maintaining this growth will be challenging. Jet.com has had trouble breeding customer loyalty and encouraging shoppers to return for future purchases. As of February 2016, 70% of all sales were from first-time buyers, according to Slice Intelligence, meaning just 30% of purchases were from loyal shoppers.
Even with new inventory from ShoeBuy, Walmart could continue to see limited returns from Jet.com if consumers fail to come back for future purchases. Looking ahead, Jet.com will need to focus on engaging consumers and encouraging them to return via initiatives like loyalty programs, or by expanding inventory and product categories.
E-commerce has been on the rise in the last several years, thanks in large part to titans in the industry such as Amazon and Alibaba. E-commerce will truly become the future of retail, as nearly all of the growth in the retail sector now takes place in the digital space.
BI Intelligence, Business Insider's premium research service, forecasts that U.S. consumers will spend $385 billion online in 2016. Moreover, BI Intelligence predicts that number will grow to $632 billion in 2020.
This is hardly surprising considering e-commerce's healthy growth. Though the U.S. retail average growth rate in the first half of 2016 was just 2% for total retail, it was 16% for e-commerce.
The number of online shoppers has grown by nearly 20 million from 2015 to 2016. And these 224 million shoppers are spending more, as the total amount spent online grew from $61 billion in the first quarter of 2015 to $68 billion in Q1 2016. Finally, these customers are transacting more frequently, as the number of online transactions has risen by 115 million from 2015 to 2016.
But all of this shopping online creates its own set of challenges, both for consumers and the companies that are trying to get their products onto shoppers' screens and into their shopping carts. In short, you need a plan.
And to create your ultimate e-commerce battle plan, you need the right intel.
BI Intelligence is here to help.
Our team of industry experts has you covered on topics such as:
- Shopping cart abandonment
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