quarter of a billion dollars. But there was a glitch: the firm and
offering made no sense. Jet.com announced soon after launch that
they were scrapping the membership model, as business was so strong
without it. This is the PR equivalent of turning chicken shit into
chicken salad. At the time of Walmart’s acquisition, Jet.com was
spending $4 million/week on advertising and needed to get to $20
billion in annual sales—more revenue than Whole Foods or Nordstrom
—to break even.^80 As traditional consumer marketing wanes in
importance at the hands of digital, and better products emerge that
consumers can discover using new tools of diligence, entrepreneurs’
ability to spin lemons into lemonade to raise ridiculous amounts of
capital, position themselves as “disruptive,” and sell to an old-
economy firm hysterical over its deepening crow’s feet, is the new
“marketing.”
While Walmart attempts to bolt on an e-commerce operation to its
existing physical retail infrastructure, Amazon is building and
acquiring stores to complement its robust online retail—and is likely to
win as a result. Consumers increasingly prefer a channel-agnostic
experience, where digital (specifically your smartphone) serves as the
connective tissue between consumer, store, and site. The consumer
always wins, and she has a choice: Door 1, a great e-commerce
experience; Door 2, a great in-store experience; or Door 3, a great site
and store experience connected by her mobile phone. The ability to
reserve something on her phone, pay later on mobile or desktop, pick
it up in store, and never have to wait in a checkout line is damn near
unbeatable. Sephora, Home Depot, and department stores already
have this kind of multichannel integration.
The future of retail may currently look more like Sephora than
Amazon in its current form. However, Amazon has the assets (capital,
technology, trust, unrivaled investment in last-mile fulfillment) to
realize the multichannel dreams of consumers, and help other retailers
get there (for a price) as well.
Ultimately, then, why should Amazon, the king of online retail, get
into multichannel retail?^81 Because e-commerce doesn’t work, isn’t
economically viable, and no pure e-commerce firm will survive long
term.