A customer places school supplies into a shopping cart at a Wal-Mart Stores Inc. location in Burbank, California, U.S. (Photographer: Patrick T. Fallon/Bloomberg)  

Walmart’s Jet Traffic Declines as Hipsters Prove Costly to Reach

(Bloomberg) -- Jet.com is losing altitude.

Walmart Inc., Jet’s owner, has increased marketing of its primary website while scaling back promotion for Jet. While the shift may help maintain the retailer’s declining profit margins, the impact has been felt on Jet’s website, where traffic declined about 60 percent in March compared with a year earlier. Walmart.com’s traffic, meanwhile, was up 5 percent over the same period, according to data tracker SimilarWeb.

Walmart’s Jet Traffic Declines as Hipsters Prove Costly to Reach

The move comes as Walmart revamps its main website and looks to lure more upscale customers there with new apparel brands, expanded home-delivery options and a partnership with department store Lord & Taylor. This could draw even more shoppers away from Jet, whose “smart cart” shopping feature -- which provides discounts for ordering more items or forgoing returns -- has already been adopted by Walmart.com.

“So long as Walmart’s numbers are strong it doesn’t matter what happens to Jet,” said Sucharita Kodali, an analyst at Forrester Research. “This makes it easy to sunset Jet and focus on Walmart. I’m not sure, honestly, why Jet is even still around.”

Jet’s spokeswoman Meredith Klein said in an email that website traffic is an “imperfect way of looking at it” and “not that meaningful” given changes the company is making to stand out from competitors. The site is investing more in key urban markets like New York and San Francisco and its share of new customers coming from those areas has increased compared with last year, according to the company.

The duration of an average visit on the site has also risen over the past year, according to SimilarWeb.

Still, the declining overall traffic could present a challenge for Jet’s new president, Simon Belsham, who joined the company last month. The Hoboken, New Jersey-based e-commerce company, acquired by Walmart in 2016, built a following among upscale urban shoppers and its co-founder, Marc Lore, is now running Walmart’s U.S. online unit.

Walmart Chief Executive Officer Doug McMillon told analysts in February that Jet will grow again in the future, but for now it will focus on markets like New York, where Jet’s purple-hued billboards have blanketed the city’s transit stations.

“Walmart is just a really well-known brand for value throughout the country,” the CEO said then. “When you get into Oklahoma and Texas, in the middle of the country, it just makes a lot of sense to invest in that brand rather than investing a higher incremental dollar to introduce a brand that’s less familiar.”

©2018 Bloomberg L.P.