The "Sam Walton College of Business"... That's where Walmart CEO Doug McMillon got his BA. It's named after Walmart's founder, and the dress code is business pleated, not Silicon Valley untucked. And deep reporting by Recode has revealed that profit-focused retail types at Walmart are annoyed with its new ecommerce darlings.
Jet.com got acquired in 2016 for $3.3B... and it's appeared to put up big results. But it turns out many at Walmart resent Jet.com and the new techies on the block.
- The positive PR spin: Walmart's got its mojo back. It's putting up a legit fight against Amazon and is even beating Bezos in some spots (it was first to offer free 1-day shipping).
- The stone cold sober truth: Walmart's ecommerce efforts lose $1B per year. And Walmart only owns 5% of total online shopping in the US, behind Amazon's 38% (according to Recode).
- The latest: CEO McMillan is telling Jet.com's Marc Lore to cut costs. But Jet.com founder-turned-Walmart-ecommerce-guru says they must actually increase spending if Walmart's serious about beating Amazon.
Growth vs. Profit... With tech changing so many industries, you find situations where companies have old-and-profitable divisions squabbling with new-and-growing ones. Managers need the profits now to fuel growth for tomorrow. But the clash of culture can kill morale (and make the old guard feel un-loved). That tension is playing out in plenty of places:
- Walmart: Its physical stores made nearly $7B in profit last year, but we all know the future is online and omni-channel commerce (a combo of online and in-store).
- Automotive: Gas-guzzling trucks/SUVs are making all the money, but management loves to talk about self-driving tech and electric cars.
- News: Fox News and CNN are making bank on TV (political ads are their profit puppies), but the growth is in digital and mobile.