Jet.com to Launch PL Targeting Millennials

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Jet.com to Launch PL Targeting Millennials

By Randy Hofbauer - 09/29/2017

Ecommerce retailer Jet.com, a subsidiary of Bentonville, Ark.-based Wal-Mart Stores Inc., has revealed plans to launch a line of private label goods geared toward the “metro Millennial consumer,” The Wall Street Journal has reported.

Based in Hoboken, N.J., Jet will begin selling roughly 60 food and household items during the next two months, with baby, beauty and pet products joining the lineup afterward, all delivered in shipping-friendly packaging instead of packaging designed for store shelves, WSJ noted. Although the products will span dozens of categories, breakfast cereals, in particular, will be a “big focus,” according to the New York Post, which also covered the impending launch.

The new initiative is part of a “broader effort” by Marc Lore, president and CEO of Walmart U.S. ecommerce, to offer specialty goods via Jet that can't be purchased elsewhere, including at Walmart, WSJ reported. It is aimed to differentiate Jet, which is known as a discount retailer, from its parent brand.

Although the e-tailer has been offering several Walmart private brands, including Great Value, Sam’s Choice and Equate, they haven't performed well with the target Millennial market to which Jet appeals, the Post said. The new brand, whose name has not been shared, might make it to Walmart shelves in the future, however, according to a source familiar with the new initiative. This could be one way that Walmart boosts its appeal to Millennials as a destination for unique groceries that cater to the demographic.

“Walmart is clearly letting Jet ‘run’ with a separate strategy that some think will cannibalize Walmart.com sales,” said Matt Sargent, SVP of retail at Minneapolis-based research consultancy Magid. “Walmart is making this choice due to the fact that Jet.com users represent a demographic – younger, more affluent, more online-centric – that typically has opted for the likes of Target, Trader Joe’s, Costco or Whole Foods versus Walmart.”

Seeing how online-savvy the Jet customer is illustrates why Walmart has opted to allow Jet pursue its own online grocery service, he said. According to Retail Pulse’s March 2017 study of customers, 54 percent of Jet users indicated that they have frequently purchased groceries and household supplies online, compared with only 12 percent of the general population and 14 percent of Walmart core customers who indicated frequent online purchases of groceries and household supplies.

“Jet.com represents the ideal opportunity for Walmart to quickly expand its digital grocery ambitions with a cutting-edge, digitally focused customer,” Sargent stressed.

Jet isn’t the only brand Walmart has been refreshing or expanded this week to increase its appeal to a specific base. Earlier, Walmart relaunched its nearly 20-year-old Parent’s Choice brand, which offers diapers, wipes, baby food and more, and will now grow to comprise more than 275 essentials.