Wal-Mart Tries to Take Jet.com Upscale

By Sarah Nassauer Features Dow Jones Newswires

One year after Wal-Mart Stores Inc. bought Jet.com for $3.3 billion, shoppers will get a glimpse of how it hopes to use the startup to battle Amazon.com Inc.

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Jet plans to start selling apparel from niche online sellers that Wal-Mart has acquired over the past year, according to people familiar with the matter. It is expected to add clothes from ModCloth in coming months and Bonobos men's apparel next year, one person said.

Ahead of the winter holidays, the website also plans to introduce a new line of private-label food and other grocery items, according to people familiar with those plans.

The moves are part of a broader effort by Wal-Mart U.S. e-commerce head Marc Lore to offer shoppers specialty goods that can't be bought elsewhere and to differentiate Jet from its parent brand. They also shift Jet, which launched in 2015, away from its roots as a discount retailer.

Jet will start selling around 60 food and household products over the next two months, later adding baby, beauty and pet products that aim to give shoppers a more premium option than Wal-Mart's existing store-brand selection, said one of these people. The items will use shipping-friendly packaging, not packaging designed for products sold primarily from store shelves.

A spokeswoman for Jet confirmed that a line of private-brand products called Uniquely J would be released, designed with the "metro millennial consumer" in mind, but wouldn't discuss further details.

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The Hoboken, N.J.-based unit is also developing a bed-in-a-box brand, said another person familiar with the plans, similar to the compressed mattresses touted by a growing group of startups. The mattresses are mainly sold online and shipped to consumer's homes.

Wal-Mart announced Wednesday it would expand its baby brand Parent's Choice, adding bedding, baby food and a stainless steel sippy cup.

Amazon is boosting its private-brand selection as well. After it acquired Whole Foods, it quickly added the grocer's store brand, 365, to its online offerings.

Private brands don't shoulder marketing expenses, which means they produce higher profits that can help offset the cost of shipping orders to shoppers' homes, said Jeff Gamsey, vice president of private brands for Boxed.com, an e-commerce company that ships bulk goods. In its first years, Boxed developed its Prince & Spring private label, starting with paper towels and toilet paper. It now sells about 65 products under the brand, he said.

As Jet embraces private and specialty brands, it has pulled back on some costly experiments, like delivering fresh food to homes. In recent months, Jet's fresh-food delivery service has been scaled back and dropped from areas like Fort Bragg, N.C., while remaining in large urban centers like New York City.

--Telis Demos contributed to this article.

(END) Dow Jones Newswires

September 28, 2017 18:49 ET (22:49 GMT)