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Saturday May 23, 2020 |Notes

Finding the right formula

One of the greatest things about digital commerce is the ability to experiment, learn, and revise in a much faster manner than in the physical world. While some companies find the right formula for product-market fit early, it's not always the case.

This past week, Walmart showed again that it's unable to compete directly with Amazon by giving up on its Jet.com business. The company had was acquired Walmart in 2016 for about $3 billion, and after losing over $2 billion in 2019, was shut down this year. The site had been hailed as a legitimate rival to Amazon's ecommerce stronghold, yet never gained much traction with consumers.

This doesn't mean that Walmart is giving up on ecommerce. Instead it shows they have decided not to compete with Amazon head on by fulfilling orders for warehouses. Instead, Walmart is playing to their strengths by using their existing network for retail stores to fulfill orders. Over the last two weeks, Walmart has picked up ecommerce market share while Amazon struggled to meet demand. Walmart has also introduced new grocery shopping options, including a 2 hour window.

It's telling that America's largest retailer, Walmart, have chosen to attack ecommerce in a different manner than Amazon. Too many ecommerce companies try to outdo other sites in areas that are already dominated by others - and are unlikely to set them apart anyway.

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