How Walmart Can Play Amazon’s Game

It’s Steve here, filling in for Jessica who’s on vacation. Walmart’s $3.3 billion purchase of Jet.com has prompted debate about whether the deal is a sign that Jet failed or not. A more interesting question is the impact Jet CEO Marc Lore will have on Walmart.com, which he’s taking over. Specifically, can Mr. Lore change Walmart’s mindset about how to compete with Amazon?

While Walmart and Amazon appear to be in the same business—they both sell you stuff—Amazon is playing a completely different game. Walmart is a retailer, focused on moving inventory quickly. While Amazon does that, it’s also running a fast-growing fulfillment service for other retailers, renting out its network of warehouses, sorting centers and carrier relationships.

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Walmart has a lot going for it. For one thing, it has far more assets than Amazon does that it can leverage—5,000 stores in the U.S. alone, and about four times the property, plant and equipment assets on its balance sheet as Amazon, in dollar terms. It’ll be up to Mr. Lore and the Jet team to persuade Walmart’s leadership to use those incredible assets less like a 19th-century retailer and more like a 21st-century platform for commerce

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Amazon has about 353.7 million products available on its website, while Walmart.com has just 11 million.