Here’s a fact. I have only stepped into WalMart twice in my life. Once when my good friend (whose wife seems to love the place) wanted to shop. (I was more than amazed that someone would venture to WalMart to shop.) The other time was when an ex-girlfriend needed to buy some pet food- and it was midnight. (It seemed the only shop opened near her was a WalMart).

But, while that may be fascinating (NOT), there’s plenty about WalMart you should know. WalMart it the largest retailer in the US. (Of course, if you believe that you should be buying US goods, then you should reconsider your choices.). And, I’ll bet you didn’t know that WalMart is also the US largest grocery chain. (I sure didn’t. But, new competitors like Aldi certainly do- and they are targeting WalMart customers to become theirs.)

Which is why WalMart is aiming to introduce fresh vegetables to their stores. To communicate to their customers that the food they sell is both fresh and of good quality. WalMart is also opting to offer grass-fed (and antibiotic-free) beef. They are starting to offer more and more of their own baked goods. (They claim that 60% of baked goods are now prepared on site.)

WalMart is also putting een more pressure on its long-time vendors. While Proctor & Gamble has managed to sell its Tide virtually unfettered in WalMart for years- as part of the total $ 10+ billion P&G products annualy marketed by WalMart. Now, you can see PerSil (a Henkel product) side by side with Tide  on a WalMart shelf.   The whole shelf-allocation is designed to earn concessions from P&G, which seems to be letting folks like Aldi sell Febreze (another P&G product) for a fraction of what Walmart does. (WalMart has now obtained those price concessions. Not that you should be surprised, since WalMart provides about 14% of P&G’s total revenue!)

Just imagine the pressure placed on other vendors- the ones who are already worried about Chinese imports to the US. Because WalMart is well known to force each vendor to offer lower and lower prices to keep their wares on WalMart shelves.

And, WalMart is doing this because it seems that the grocery business is what is bringing in the customers to the rest of the store. (That is one of the reasons why Target is upping its grocery component, too.)

Even as this is going on, WalMart is beefing up its online sales.  They have seven distribution sites around the US.  Making sure that Amazon, which is now offering food and groceries to its customers, won’t be eating WalMart’s lunch (pun intended). As a matter of fact, WalMart sells stuff online that you would never find in any of its stores- things like high end merchandise.

After all, WalMart.com is the 2nd busiest eCommerce site in the US . (There’s $ 14 billion in sales- but that’s only 3% of the total turnover for the firm.) WalMart accrues about 88 million unique visitors a month who are examining the 11 million or so items offered on the site. Which is about 100X the items you could find in a brick-and-mortar WalMart.  Nevertheless, the universe of WalMart.com product offerings is swamped by the 260 million found on Amazon.   And, that’s after 15 years of trying.

That is another reason Walmart has decided to spend $3.3 billion to acquiesce Jet.com,  mostly because Jet has an algorithm that promotes bulk buying by consumers.  That plays into WalMart pricing power and distribution prowess.  And let us not or get that Jet has the millenials and urban consumers-  two segments where WalMart falls abysmally short. WalMart determined at least 80% of Jet’s customers has ever visited its sites. And Jet’s CEO, Jeff Lore, will become the head of WalMart.com.  [Jeff is considered to be one the most eCommerce operators- according the head of Bessemer Ventures.]

(Jet, on the other hand, is taking the deal because their burn rate is $ 40 million- a month!  And, given that they won’t be breakeven until 2020 and their valuation won’t offer enough cash to make that date (nor would venture capital meet the needs), it’s the perfect time to be bound to the deep pockets of WalMart.  It doesn’t hurt that this will be the largest eCommerce startup acquisition ever. And, Jet can still meet their goal to overtake Amazon.

With one big hurdle:  States demand the payment of sales tax when there is a physical presence in their state.  Jet will now be moving from no real physical presence to an international one- if it operates as part of or the parent of Walmart.com.  So, their prices will now be subject to sales tax!)

This online business is critical to WalMart, since the sellers on its site pay it a commission for their sales- and WalMart is not responsible for shipping or warehousing any of these items. So, WalMart is carefully guarding its $ 13 billion eCommerce business; adding more and more products for its customers’ purchases.   Because it is yet another way to keep up its profit margins.

It’s a dog-eat-dog world out there.

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