Thursday, November 3, 2016

E-COMMERCE SHAKEUP AT WALMART

Wal-Mart E-commerce Executives Depart in Wake of Jet.com Purchase

Exits signal likely changes to retail giant’s online operations

Jet.com founder Marc Lore has flagged other changes. Above, a Jet.com fulfillment center in Kansas. ENLARGE
Jet.com founder Marc Lore has flagged other changes. Above, a Jet.com fulfillment center in Kansas. Photo: Daniel Acker/Bloomberg News
A management shake-up is hitting Wal-Mart Stores Inc.’s e-commerce operations as Jet.com founder Marc Lore takes the helm, a sign the online entrepreneur is moving swiftly to put his stamp on the giant retailer.
Several e-commerce executives are leaving the company in the wake of the $3.3 billion purchase of Mr. Lore’s startup Jet.com Inc., which closed in September. The departures include Fernando Madeira, head of Walmart.com, Dianne Mills, senior vice president of global e-commerce human resources and Brent Beabout, senior vice president of e-commerce supply chain, a spokesman said.
Mr. Beabout left in recent weeks and will be succeeded by Jet.com co-founder Nate Faust, who will lead fulfillment operations for Jet.com and Walmart.com. Ms. Mills’ departure was announced internally Monday. Mr. Fernando will leave after helping Wal-Mart with its Brazilian website and several other projects.
In September, Helen Vaid, vice president of digital store operations for Wal-Mart e-commerce left to become chief customer officer for Pizza Hut, which is owned by Yum Brands Inc. Ms. Vaid’s decision to leave predated the Jet.com acquisition and wasn’t related to the deal, said a person familiar with the situation.

From the Archives

0:00 / 0:00
Skip Ad
in 15
Wal-Mart will buy online retailer Jet.com in a $3.3 billion cash and stock deal, the largest-ever purchase of a U.S. e-commerce startup. WSJ’s Rolfe Winkler has detail on Lunch Break with Tanya Rivero. Photo: Bloomberg (Originally published Aug. 8, 2016)
Mr. Lore is “still going through and analyzing the organizations and seeing what makes the most sense for running Walmart.com and Jet.com,” the Wal-Mart spokesman said. The chain said its top online executive, Neil Ashe, was leaving when it announced the Jet.com deal in August.
The departures are signs that Wal-Mart’s e-commerce operations will get a drastic makeover as Mr. Lore works to boost what have been mostly sluggish sales since Wal-Mart first started a website over 15 years ago. Mr. Lore cut his e-commerce teeth by founding Quidsi Inc., known for Diapers.com, eventually selling the company to Amazon in 2010 for $550 million. Wal-Mart is encouraging Mr. Lore to stay for at least five years with financial incentives, according to filings.
In recent weeks, Mr. Lore and Wal-Mart executives have flagged other changes. Wal-Mart plans to adopt Jet.com’s “smart basket” technology on its own website, a system that lowers the price of shopper’s purchases based on metrics like using a debit card to pay, foregoing returns or buying items stocked in the same warehouse, conditions that save the retailer money.
Wal-Mart needs a jolt to keep up with Amazon.com Inc. Wal-Mart’s global e-commerce sales hit nearly $14 billion last fiscal year, or 3% of its $482 billion in annual revenue. Amazon’s revenue was $107 billion last year, including its web-services business. Wal-Mart has spent billions in recent years to build e-commerce fulfillment centers that help shorten order delivery times, add online grocery pickup services to stores and improve the technology that underpins Walmart.com.
That investment has lifted shipping and technological limitations, including an 8 million item cap on how many products could be listed on Walmart.com. That restriction has limited Wal-Mart’s online growth. Heading into the holidays, Walmart.com has more than 20 million products, said Steve Bratspies, chief merchandising officer for Wal-Mart U.S., last week. That still lags behind Amazon’s offer of hundreds of millions of products.
Write to Sarah Nassauer at sarah.nassauer@wsj.com