When it comes to thriving in the world’s highly competitive marketplace, companies have to make brave decisions as to mergers and acquisitions that would contribute to their value. This is exactly what Walmart did by entering into the online retail industry led by Amazon, the world’s biggest and most successful retailer. However, with the acquisition of the company in the field completely different to the Walmart’s main operations focus, Arkansas company can make its way to the greater profits and possibly a leading place in the field.
Reasons For Walmart’s Arts Industry Entrance
Art.com is considered to be one of the largest online retailers in the art and décor category. That is what makes it especially interesting for the American retailing giant as it has already conducted an array of acquisitions in the online sector including companies like Jet.com, ModCloth, Moosejaw, Bonobos, Eloquii and Bare Necessities. These stand for quite a portfolio of brands targeted at the satisfaction of the needs of a younger millennial audience of Walmart.
Here are a few more interesting facts concerning the acquisition in question which will help you better understand Walmart’s motives and reasons therefor:
- online business as a strategic goal: it is just recently when this company has put its leg into the online retailing business domain thus becoming a decent competitor to Amazon. In the future, the company aspires to own upwards of 40 digitally native brands which would only be offered on its online platform thus making it a unique selling point;
- art as a primary field of millennials’ interest: in order to acquire more customers to the corporation’s overall business portfolio, Walmart has decided to enter a strategically interesting sector where a younger and more progressive audience is concentrated;
- acquisition cost amounts to approximately $3 billion: even though the final sum remains undisclosed until the deal is finalized in 2019, it is said that it corresponds to the ones already conducted. Thus, the acquisition of Jet.com cost the company up to $3 billion.
To wrap things up, the recent deal of the American largest retail corporation has stormed the magazine’s headlines and newspapers. This is owing to the fact that the company has acquired one of the largest online retailers of affordable art and decor items. This has to do with Walmart’s long-term strategy of winning in the e-commerce battle with the Amazon, the current world’s unquestionable leader in the field.