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4 Pieces Of Advice For Wal-Mart Now That Jet.com Acquisition Officially Closed

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4 Pieces Of Advice For Wal-Mart Now That Jet.com Acquisition Officially Closed

Wal-Mart Stores, Inc. (NYSE: WMT)'s $3.3 billion acquisition of Jet.com closed Monday, but the retailer's woes won't go away overnight.

Bloomberg Gadfly's Shelly Banjo offered four pieces of advice for Wal-Mart that could help close the gap between its online business and Amazon.com, Inc. (NASDAQ: AMZN).

1. Focus On The Customer

Amazon ignored its bottom line for years in favor of gaining market share. On the other hand, Wal0-Mart has focused on turning a profit, one of the reasons why it loses to Amazon in online sales.

Meanwhile, Jet's entire business model of driving down costs for consumers serves as a hint that "Walmart might continue to pursue profits over pleasing customers."

Banjo further suggested that Jet's business model is also similar to those of daily deals and auctions. Moreover, "jumping through hoops" such as receiving a discount for opting out of a warranty or paying by debit card to lower a retailer's cost "shouldn't be a shopper's job."

Related Link: How Does Target's New $5 Billion Buyback Plan Stack Up Against Other Retailers?

2. Pounce On Amazon

Part of Amazon's popularity is due to its marketplace that connect consumers with smaller merchants. However, behind the scenes, Amazon's relationship with third-party merchants is quite poor in some cases.

Wal-Mart should start "luring" sellers away from Amazon and "pounce on existing seller frustration" with Amazon.

Jet's business was built on the premise of selling others' brands and could help Wal-Mart in this case.

3. Focus On Neglected Categories

Consumers typically don't care for brand names when it comes to home goods and decor. Wal-Mart could focus on these categories considering Amazon relies on third-party sellers to instead of building out the category on its own.

4. Take Advantage Of 'Street Cred'

Simply put, Wal-Mart's acquisition of Jet gives it "some short-term street cred to mount an aggressive attack on Amazon." As such, Wal-Mart needs to give Jet's CEO Marc Lore the "room and funds" to upgrade Wal-Mart's supply chain.

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Posted-In: Bloomberg Gadfly Jet.com Marc LoreAnalyst Color M&A News Movers Media Best of Benzinga

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