Marc Lore, a series entrepreneur who sold his start-up Jet.com to Walmart for $ 3 billion and then oversaw the transformation of the retail giant’s e-commerce business over the past four years, leaves behind his full-time role at the company. of the month, he told Recode.
His next big business turnaround will be something far removed from his current expertise: a ten-decade project to ‘build a city of the future’, supported by a reformed version of capitalism.
“This is a new model for society that we are going to test,” he teased.
Lore declined to comment further, but said he was prepared to release additional information in the coming months. Some people who have heard of the project say that one focus will be on giving everyday citizens direct economic head in the growth of the city.
“Imagine a city with the vitality, diversity and culture of New York City, combined with the efficiency, safety and innovation of Tokyo and the sustainability, governance and social services of Sweden,” reads the vision statement for the project. “This will be our new city.”
“It’s going to be a lifelong project,” he added. “That’s the thing I’m passionate about.”
The entrepreneur and executive said he also plans to spend more time on philanthropy, advising startups and serving on public boards, while also writing a book and working on developing a TV -program. He said he has ideas for new new ventures that he also wants to follow, but made it clear that he does not intend to run them as CEO.
Lore’s departure comes almost four and a half years after Walmart made its biggest acquisition of the time, spending $ 3.3 billion in 2016 on the purchase of the retail website Jet.com, which he managed and launched just 15 months earlier. has.
The move was a bold bet for Walmart CEO Doug McMillon, who did it primarily to hire Lore and his executive team, hoping they could close the huge gap in online sales between the legacy retailer and Amazon diminishing the talent in the tech industry – and to Wall Street investors – that Walmart was finally serious about reinventing itself for the future of shopping that Jeff Bezos’ tech giant created.
Lore arrived at Walmart with knowledge of how Amazon worked – he was previously co-founder and CEO of Quidsi, a collection of online shopping centers best known for Diapers.com, which acquired Amazon in 2011 for about $ 550 million. . a few years before you start creating Jet.com.
In many ways, McMillon’s bet on Jet.com and Lore was a success. Walmart.com is now the no. 2 online shopping site to Amazon in the US, which more than doubled its market share of online sales to 5.8 percent during Lore’s tenure, according to research firm eMarketer. The retailer’s share price has risen more than 80 percent since the acquisition – outpacing the growth of the S&P 500 over the same period. Walmart is now valued at more than $ 400 billion and has shaken off much of its reputation as a digital dinosaur in the business world.
“I would like to think that people think a little differently about Walmart than four and a half years ago,” Lore said.
Under Lore, Walmart has also expanded its online merchandise catalog eightfold, while retailers selling on Amazon offer another market option to try to diversify their businesses. Walmart also introduced free two-day delivery as well as next-day and same-day delivery options on a limited range of goods.
In September, it unveiled Walmart +, a $ 98-a-year membership program delivering groceries and other benefits, as an alternative to Amazon Prime. Walmart’s e-commerce sales rose nearly 80 percent year-on-year in the third quarter of 2020, as it remained one of the biggest beneficiaries of in-store shopping trends during the Covid-19 pandemic.
However, it was not all smooth. Amazon’s US e-commerce business is still nearly seven times larger than that of Walmart, and Lore’s division’s large spending and strong financial losses in the first few years have created tensions within the country.
Recode previously reported that the former leader of Walmart’s much larger, and profitable, brick-and-mortar business had sprinkled some of Lore’s internal investments and the credit the entrepreneur had gained for growing Walmart’s pickup groceries , which was technically an online shopping. product but exported by employees of the store. Among the internal startups that were not planned was Jetblack, a concierge service aimed at wealthy urbanites. Lore said earlier he understands the frustration and calls the tension ‘not unhealthy’.
But the losses led to Walmart leadership thwarting some of Lore and the team’s more ambitious plans, including a massive expansion of new online store warehouses for which they worked to better compete with Amazon, and ‘ an aggressive acquisition strategy to build a portfolio of digital-natives. consumer brands that can help the retailer differentiate its Amazon merchandise catalog and attract new customer demographics.
Walmart did acquire some online indigenous digital brands such as Bonobos, ModCloth and Eloquii under Lore, but the executive initially planned to enter into more transactions. Walmart eventually sold ModCloth and at one point also considered a sale of Bonobos.
“This is one of those areas that did not play out as I would have hoped,” Lore said Thursday. “The businesses did not perform as I had hoped.”
Lore’s departure would be expected at some point due to his entrepreneurial tendencies, and it was more a matter of when as if. Its massive Jet Acquisition compensation package requires him to stay at Walmart for an extraordinarily long period of five years – until September 2021 – to receive his full payout, which includes a share allotment in the final year of the transaction alone, which currently valued at about $ 150. million.
He said the two parties were still working through the financial implications of his departure, and that they were comfortable with his slightly early retirement because the company merged a large portion of its e-commerce and physical store divisions into united teams last year. under John Furner, CEO of Walmart.
Lore will remain an adviser to Walmart and said his close relationship with CEO McMillon means he will do everything in his power to help the retail giant – but a bargain of online shopping – in the future. What should the 58-year-old retail titan do to narrow the gap with Amazon?
“To continue to be brave and not be a follower,” Lore said. “The quick follow-up strategy is not going to do that.”
Marc Lore at the 2019 Recode Code Commerce Conference