Walmart’s Marc Lore Leaves Ecommerce Role to Build City of the Future

Marc Lore, a serial entrepreneur who sold his Jet.com start-up to Walmart for $ 3 billion, then oversaw the transformation of the retail giant’s e-commerce business over the past four years , leaves at the end his full-time role in the company. of the month, he told Recode.

His next big entrepreneurial swing will be something far removed from his current expertise: a decades-long project to build “a city of the future” supported by “a reformed version of capitalism”.

“It is a new model of society that we are going to test,” he teased.

Lore declined to provide further details, but said he would be ready to reveal more information in the coming months. Some who have heard of the project say that one of the goals will be to provide ordinary citizens with a direct economic advantage in the growth of the city.

“Imagine a city with the dynamism, diversity and culture of New York combined with the efficiency, safety and innovation of Tokyo and the sustainability, governance and social services of Sweden,” the report reads. vision statement for the project. “This will be our new city.”

“It will be a lifelong project,” he added. “That’s what excites me the most.”

The entrepreneur and executive said he also plans to devote more time to philanthropy, advising startups and serving on the board of directors of public companies, while writing a book and working on the development of ‘a television show. He said he had ideas for new startups that he also wanted to pursue, but clarified that he did not intend to lead them as CEO.

Lore’s departure comes nearly four and a half years after Walmart made its largest acquisition of the time, spending $ 3.3 billion in 2016 to buy the Jet.com shopping website he ran and owned. launched 15 months earlier.

The move was a bold gamble for Walmart CEO Doug McMillon, who did it primarily to hire Lore and his management team, in the hopes that he could close the huge online sales gap between the former retailer. and Amazon, while signaling to talent in the tech industry – and Wall Street investors – that Walmart was finally serious about reinventing itself for the future of shopping that tech giant Jeff Bezos was creating.

Lore came to Walmart with a deep understanding of how Amazon works – he previously co-founded and ran Quidsi, a collection of better-known online shopping sites for Diapers.com, which Amazon acquired for around $ 550 million in 2011. Lore worked at Amazon for a few years before leaving to create Jet.com.

In many ways, McMillon’s bet on Jet.com and Lore was a success. Walmart.com is now the second-largest online shopping site after Amazon in the United States, more than doubling its online sales market share to 5.8% during Lore’s tenure, according to research firm eMarketer . The retailer’s share price has risen more than 80% since the acquisition, which is higher than the growth of the S&P 500 during the same period. Walmart is now valued at over $ 400 billion and has lost much of its reputation as a digital dinosaur in the business world.

“I would like to think people think of Walmart a little differently than they did four and a half years ago,” Lore said.

Under Lore, Walmart has also increased its online product catalog eight-fold, while giving smaller merchants selling on Amazon another market option to try and diversify their business. Walmart also introduced free two-day shipping, next-day and same-day delivery options on a limited selection of products.

In September, it unveiled Walmart +, a $ 98-a-year subscription program that offers grocery delivery and other perks, as an alternative to Amazon Prime. Walmart’s online sales grew nearly 80% year-over-year in the third quarter of 2020 as it continued to be one of the biggest beneficiaries of consumer buying trends in the world. retail sector during the Covid-19 pandemic.

But it was not all easy. Amazon’s ecommerce business in the US is still nearly seven times larger than Walmart’s, and heavy Lore division spending and heavy financial losses in the first two years have created internal tensions. .

Recode previously reported that the former executive of the much larger and profitable Walmart company was bristling with some of Lore’s internal investments and the credit the entrepreneur had secured for growing the edge grocery business. from Walmart Street, which was technically an online shopping. produced but performed by store employees. Jetblack, a concierge service for affluent city dwellers, is one of the internal startups that have failed. Lore previously said he understood the frustration and called the tension “not unhealthy”.

But the losses have led Walmart management to harness some of Lore and the team’s more ambitious plans, including a massive construction of new e-shopping warehouses they’ve been pushing to better compete with Amazon, and a Aggressive acquisition strategy to build a portfolio of digital-native mainstream brands that could help the retailer differentiate its merchandise catalog from Amazon and attract new customers.

Walmart has acquired a few native online digital brands like Bonobos, ModCloth and Eloquii under Lore, but the executive originally planned to close more deals. Walmart ended up selling ModCloth and also considered selling Bonobos.

“This is one of the areas that has not gone the way I would have hoped,” Lore said Thursday. “These businesses did not work out as I hoped.”

Lore’s departure was expected at some point due to her entrepreneurial tendencies, and it was more about when that if. His massive compensation package from the Jet acquisition required him to stay at Walmart for an unusually long five years – until September 2021 – to receive his full payout, which included an allocation of shares over the last. year of the transaction alone which is currently valued at around $ 150. million.

He said both sides are still working on the financial implications of his departure and are comfortable with his slightly early exit, as the company combined much of its e-commerce and physical stores divisions last year. into unified teams under the leadership of Walmart U.S. CEO John Furner.

Lore will remain an advisor to Walmart and said his close relationship with McMillon, the CEO, means he will do whatever he can to help the retail giant – but the underdog of online shopping – to succeed in the future. What must the 58-year-old retail titan do to close the gap with Amazon?

“To continue to be bold and not be a follower,” Lore said. “The fast follower strategy is not going to work.”