Illustration: Aïda Amer/Axios

Walmart yesterday announced plans to shutter its Jet.com e-commerce brand, less than four years after buying it for $3.3 billion.

Under the hood: Appearances can be deceiving. Not only was this deal not a failure for Walmart, but it arguably was the retail industry's most successful acquisition ever of a tech company.

History: Jet.com was still pretty embryonic when Walmart agreed to buy it in August 2016.

  • The company had only been founded two years earlier, and publicly launched just one year earlier, with an ambitious goal to take on Amazon.
  • It was something of a revenge play by founder and CEO Marc Lore, after Amazon used anti-competitive practices to force an acquisition of Lore's prior startup (Lore, for the record, publicly disputes the spite narrative ⁠— but Tom Brady is more believable when he wishes the Patriots the best of luck).
  • As I wrote at the time for Fortune: "Jet will use a membership-based, real-time trading platform to provide deeper discounts than are currently available online, and steer users toward a 'smart cart' experience rather than impulse buys."

Fast forward: Jet's underlying thesis never really panned out, and after being acquired it transitioned more into focusing on urban millennials that Walmart otherwise struggled to reach.

  • But the deal wasn't really about Jet.com as a product or a technology. It was about Lore, who was put in charge of Walmart's entire e-commerce business, and his team.
  • In short, this was a gussied-up acqui-hire.
  • Walmart's e-commerce sales skyrocketed since the deal, including a 37% bump in 2019. And that's all before the pandemic forced changes to consumer behavior, which began to be reflected in a 74% surge for Walmart e-commerce in Q1 2020.

The bottom line: Lore hasn't gotten close to defeating Amazon, but he's helped transform Walmart into one of its largest and most viable rivals. That's a pretty strong return on investment, even if Jet.com is grounded.

Go deeper: Walmart takes aim at Amazon with new Jet.com grocery

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Illustration: Aïda Amer/Axios

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Data: Axios/Ipsos poll; Note: ±3.3% margin of error; Chart: Axios Visuals

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Illustration: Annelise Capossela/Axios

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