The beginning of 2021 seems to be featuring significant moves regarding senior executives of tech companies.
Our previous Supply Chain Matters posting highlighted the newest senior executive moves announced by SAP SE. A further development is the announcement last Friday of the pending departure of Walmart.com executive leader, Marc Lore.
Lore, who originally founded Jet.com, an online platform careering to upscale customers. came to the global retailer with the 2016 bombshell announcement of Walmart’s $3.3 billion acquisition of Jet.com, a noted Amazon.com rival at the time. Jet.com was a fast-growing platform, but typical of high-flying start-ups, was unprofitable at the time of its acquisition.
The declared strategy at the time was for Lore to jointly lead both online sites in strategy and future development. The move caught the attention of the retail industry and brought about the question of whether the largest retailer on the globe could adopt a tech start-up culture in the notions of bold online strategy and rapid growth. The open question was whether the existing Omni-channel strategy for leveraging Walmart physical and online assets and capabilities would prevail, along with whether the global retailer’s corporate culture of conservative spending and high efficiency could be married with a high-flying online business culture. Speculation at the time was that the executive move provided the opportunity for a two-phased strategy, Wal-Mart.com leveraging an Omni-channel strategy that leveraged global scale of physical and online while Jet.com would cater to more upscale shoppers seeking alternatives to Amazon and other online retail sites.
By November of 2016, senior executive changes were made with several existing Walmart online executives departing and replaced by Jet.com executives. Later, the global retailer consolidated information technology development under a singular management structure to support both online and physical in-store needs. Lore’s efforts additionally led to acquisition of other existing specialty online platforms including Bonobos, ModCloth and JetBlack, a personal shopping business. The goal was to broaden the appeal and selection of Walmart among online shoppers via separate digitally native brands. Most of these acquisitions faltered.
Subsequently, with the increasing success of core online efforts, along with a conscious decision by the retailer’s senior management team to provide an online capability that would build around the strength of physical store presence as well as added online customer fulfillment centers, the strategy has turned out to be one of online as being an integral part of Walmart’s core line-of-business leadership. Jet.com and other separate sites were eventually shutdown and increasingly, online business executives began reporting to the heads of the retailer’s geographical leaders such as its U.S. retail business unit. According to reporting by Bloomberg, a lack of communication and cooperation between different camps hindered progress, causing the retailer to merge the two business units.
Friday’s announcement included a statement from Walmart CEO Doug McMillan stating in-part: “With our structural changes behind us, we have concluded it’s time for Marc to transition out of his everyday role at Walmart.”
Lore will retire from Walmart at the end of January, after his four-year tenure, but according to a company securities filing, will remain as an executive advisor until September 2021. According to reporting By Bloomberg and The Wall Street Journal, Lore received a restricted stock award, at the time of the acquisition, initially valued at $250 million that fully vested after five years, and the extension of consulting until September, fulfills the vesting.
As the year 2021 begins, U.S. store and online business capabilities report to John Furner, the head of U.S. retail operations. Casey Carl, recruited in September 2020, with assume leadership of online activities reporting to Furner.
The initial news of Lore’s departure on Friday caused the retailer’s stock to decline 2 percent.
As for Lore, he has indicated an intent to return to entrepreneurial efforts, along with writing a book and pursuing a passion for sports ownership. Bloomberg indicated that Lore’s initial proceeds from stock grants have helped to fund a start-up termed Wonder, originally refereed to as Food Truck Inc., to be led by former Jet.com executive Scott Hilton.
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