WalMart's acquisition of Jet.com: brilliant or fool’s gold?

WalMart, determined to find a way to turbo charge its online growth, has just spent $3B on a concept brand that launched with great fanfare but has not quite delivered what it promised. Jet.com boldly claimed it would be a threat to Amazon, but building awareness and a customer base has been more difficult than anticipated.

A close look at the web metrics of Amazon vs. Jet.com shows just how far Jet is from being the impact player in this B2C space. According to SimilarWeb, Jet’s web traffic is 1/100th that of Amazon, Jet users visit 3.8 pages on average compared to 9.7 for Amazon. Jet users spend 2:45 minutes on the site vs Amazon at 6:42. And the bounce rate (% of visitors leaving the site after their first page) is an unimpressive 62% to Amazon’s 36%. In summary, their site has small traffic compared to Amazon, with customers that don’t go deep into the site, and many bounce after only one page.

Surely Jet’s stats are better than Walmart.com, right? Well, not really. WalMart.com has 15x the traffic. Walmart customers spend 4:47 minutes on the site vs a meager 2:45 for Jet, and go to 5.45 pages vs the 3.8 of Jet.com. Finally, bounce rate of 42% at Walmart is meaningfully better than Jet.com at 62%. For all measures, Jet.com underperforms v Walmart.com.

So why buy an ecommerce player that underperforms across all key measures vs your current website and technology? Irrational exuberance? Maybe. Perhaps it’s all the cool technology and the human capital that comes with it, and the belief that applying them to the Walmart.com site will make it that much better. But the data does not bear that. Of course, Walmart management has looked at the company data, and found something they think is very valuable. But from the outside, this deal looks more like fool’s gold than the turbo fuel WalMart was looking for.