Marc Lore, CEO of Walmart eCommerce
Scott Mlyn | CNBC
Walmart’s U.S. ecommerce business executive Marc Lore is leaving the big box retailer nearly five years after reaching out to the serial entrepreneur to speed up his online business.
Lore joined the company in 2016 when Walmart acquired Jet.com, the startup he co-founded, for $ 3.3 billion. The delivery service sent groceries and other household items to largely younger city customers.
With the expensive acquisition, the old brick and mortar retailer became and its CEO, Doug McMillon, made a big bet to kickstart its digital business and catch up with Amazon. The deal was viewed by investors and analysts as an opportunity for Walmart to leverage the digital expertise of Lore and his team. He had extensive experience in e-commerce. He also had insight into his fast-growing rival after he sold his former company Quidsi, the parent company of Diapers.com, to Amazon for about $ 550 million. He worked for Amazon for several years before starting Jet.com.
Lore told the company on Thursday that he would be stepping down from his position in late January, according to a Walmart financial file on Friday. He will be a strategic advisor to Walmart through September, the company said.
In an interview with CNBC, 49-year-old Lore said he and Walmart had agreed as part of the acquisition that he would stay for five years and help integrate the companies’ brick and mortar and e-commerce businesses. It has already merged these teams and is running ahead of schedule, Lore said.
“We just got there earlier than we expected,” he said.
Going forward, Lore’s team will report to John Furner, CEO of Walmart US.
Changing the narrative about Walmart
According to Lore, the acquisition of Jet.com changed the history of Walmart. He said more people see it as “a tremendous force in e-commerce and technology,” which enabled the company to recruit and hire top talent.
With this team, the retail company learned to move faster to keep up in a digital world – a mindset that has helped adapt and open popup fulfillment centers as the pandemic led to an increase in online demand have led.
McMillon attributed the pace of the retailer’s e-commerce growth to Lore in a company-wide email Friday. He said Lore had driven the redesign of the company’s website and app, redesigned the supply chain to allow for two-day, same-day delivery, and expanded the range of goods sold online.
“Marc’s leadership has helped us to be able to respond to the demand sparked by the pandemic this year,” said McMillon. “All these advances are of course the result of good work by many people, but Marc’s expertise and aggressiveness changed the game. We learned a lot from him. I personally learned a lot from him.”
Since acquiring Jet.com, Walmart’s US e-commerce business has grown dramatically – even before the pandemic. The company posted 37% online sales growth in the US in 2019, surpassing its own internal growth target of 35%. This is all the more the case as customers are restricting trips to the store and using roadside pick-up during the global health crisis.
The price of Walmart stock has nearly doubled since the day plans to buy Jet.com were announced. This exceeded the growth of the S&P 500 of 73% in the same period.
However, the retailer is still trying to accomplish another goal: turning their e-commerce business into a profitable one.
Lore declined to share a profitability schedule. He said Walmart had made progress as it reduced losses in some areas and increased its focus on sales drivers such as a wider range of general merchandise, advertising, its online marketplace and its expansion into financial services.
Walmart has acquired other digitally indigenous brands, including men’s clothing company Bonobos and oversized women’s brand Eloquii, and launched other brands such as mattress brand Allswell.
It also adds more online options for customers, from roadside collection to Walmart Express delivery, which allows purchases to be delivered to customers’ doors in two hours or less. It has also teamed up with Shopify to expand its online marketplace and signed a deal with second hand seller ThredUp to sell more brands of apparel, shoes and accessories.
However, some of the initiatives Lore cited have faded or failed. Jet.com – the start-up that originally caught Walmart’s attention – officially closed in the spring. Jetblack, a membership-based service that allowed customers to order items on demand via SMS, became a money loser that was discontinued before scaling.
According to Lore, Jet.com “served its purpose” by bringing a surge of new talent and technology to Walmart. He said even the failed efforts helped the company gain new insights into what customers want.
“We tried a lot of things,” he said. “We have developed innovations. Not all of them will work. We have learned from our mistakes.”
Return to its roots
Lore said he will return to his startup roots by creating new businesses and advising others. He plans to write a book about his life and career, work on a reality TV show, and get involved in more philanthropy.
“I won’t sit still, that’s for sure,” he said.
He declined to provide details on any of his next business endeavors as this was just beginning, but said it would create a “city of the future” with a higher quality of life.
“Here is an opportunity to test a new model for society, and just like a typical start-up, the easiest way is to do it on a clean board like I can,” he said. “Trying to change the country today would be much more difficult.”
And he said he would continue to advise Walmart as long as its executives call.
“All of the things Doug said about strengthening and trusting me and the team when we made the acquisition – he did everything he said and more, well,” he said. “I really enjoyed the experience. I learned a lot and I am grateful and will support Walmart for as long as I can – beyond my contract, beyond the strategic role.”
