When Wal-Mart (NYSE:WMT) announced its $3.3 billion acquisition of Jet.com in Aug. 2016, Vincent Shen and Motley Fool contributor Daniel Kline took a skeptical view of the deal on Industry Focus. Did a young, unprofitable e-commerce start-up really deserve a multi-billion dollar price tag?

One year later, the cast is looking back on that discussion and acknowledging how important the deal has been for the retail giant. In this video, they discuss how a total change in mindset has helped Wal-Mart move toward a successful omnichannel strategy far faster than many expected.

A full transcript follows the video.

This video was recorded on Aug. 22, 2017.

Vincent Shen: Our first one is from one year ago, last August. That was when we dissected Wal-Mart's $3.3 billion acquisition of Jet.com. Austin, if you could roll the tape please? 

(Kline): We joked about this before, but one, I think Wal-Mart is lighting money on fire here. I don't think there's anything they couldn't have duplicated in six months for half a billion dollars. So, they're spending a huge amount of money to get a guy. And I get it, Marc Lore has been successful. He's been one of the few that's been able to compete with Amazon. But I don't see what Wal-Mart is buying.

Vincent Shen: Dan, I thought we should run with this clip, because it summed up our ideas pretty nicely from that episode. To be clear, we were both pretty bearish at the time on whether Jet.com and Marc Lore would be able to move the needle for a company as big as Wal-Mart. But we're about a year in and the results so far seem pretty encouraging.

Kline: Here's the thing -- at the time, I thought they were spending $3.3 billion for a company that was losing money that only had $1 billion in sales. I touched upon it in some print articles that what they were really buying was Marc Lore. And that seemed crazy for $3.3 billion. But the reality is, he came in and brought a whole new way of thinking. He hasn't just changed how Walmart.com operates, but he's actually been given a free hand to integrate the stores and the digital operation, and they've made major changes. They're testing things like pickup towers in stores, they're putting tablets in hands of associates in the stores so they can track orders, they're actually having store associates do deliveries, they're really operating like a start-up, which is impressive for a company as big as Wal-Mart.

Shen: Yeah. In Wal-Mart's last reported quarter, this company saw growth of 2%. This is in an environment where a lot of other big box stores and department stores that we talked about on the show are getting hammered pretty hard, and that growth was based on progress in their comparable store sales and also in their store traffic. So it's the kind of progress that investors were hoping to see. Going back to that clip that we just played, a development that I think has been generating a lot of buzz for Wal-Mart as well as from the most recent results was 60% growth in online sales. And then, their gross merchandise volume, which is the value of all the goods sold across the company's online marketplace, was up 67% year-over-year. So I feel like, if we had an unbiased third-party sitting with us right now, they kind of turn to us and say, "How 'bout them apples for Wal-Mart?"

Kline: [laughs] Well, they've done two things. First, Marc and the Jet.com team came in, and they went, "We can't compete with Amazon Prime." So they got rid of their $50 Shipping Pass program and made all orders over $35 free two-day shipping. Now, the problem is they did that without having the infrastructure in place to really support it, so they threw open the floodgates and basically scotch-taped things together. And it hasn't been perfect. I bought a TV from Wal-Mart that arrived smashed, and it took me two and a half weeks to return it and about 17 phone calls. So they're not Amazon yet. But they absolutely have customers convinced that they're the viable alternative. And the reality is, just like Amazon has its 200-whatever million Prime members, Wal-Mart has a huge base of loyal customers, and maybe they're a little later to the game than digital, and Wal-Mart is coming along and giving them a place to go. And clearly it's working.

Shen: Yeah. And the thing to keep in mind, even with this Jet.com buyout, which was the company's biggest deal in terms of its e-commerce efforts, Wal-Mart has been buying up other online-focused businesses. Some of the smaller ones that I've seen include Moosejaw, Bonobos, and Shoebuy. So the more companies that they ultimately bring under their umbrella, there's of course some integration risk, but at the same time, they get a lot of people and products and mindset that they want for this online push that they're making. And I think that mindset is really what's so important for them to make the progress that investors want to see. Marc Lore, in the approximately one year since joining the company, has showed how aggressive he's willing to be and how necessary that is in what is essentially an arms racing right now in e-commerce.

Kline: I saw Marc speak last year at Shoptalk, and he talked a lot about how he'd been given a free hand by Doug McMillon, the CEO of Wal-Mart, to bring in digital-first people, to change how the thinking was. So when you buy some of these little start-ups, you get people that maybe don't have a traditional retail background, you're injecting this whole new kind of life. Now, at a lot of companies, that's going to clash really hard with the old liners, the people who have always done it one way. But at Wal-Mart, it does seem like they're taking it very seriously that they have to become an omni-channel company, and that really means putting customers first and getting people products however they want it, if they want to order online and pick-up in store, if they want it delivered at home, but return it in store, if they want to deal with a person or not, however it goes. And it's going to take time, but they're really quickly getting there.

Shen: Yeah. And I know your personal experience recently, in terms of shopping online with the company, wasn't as good. But I actually just made a purchase yesterday for a new fishing rod, and it was interesting to see all the different options that they have for fulfillment. You can make a smaller purchase and pay shipping, but as you mentioned, you can spend more than $35 and get free delivery, you can have items shipped to your local store for free pickup. So I remember Lore said something about how, if 9 out of 10 people in this country live within 10 miles of a Wal-Mart store, an option like free in-store pickup isn't a bad option, and the company has seen success in this area before with some of the other efforts that they've instituted, like curbside pickup for groceries, too.

Kline: Yeah. I think my problem was a growing pain issue. I bought a 55-inch television and I had it delivered because it didn't fit in any of my cars. So one of the options to return it was to return it to the store. But I couldn't return it to the store for the same reason I couldn't pick it up from the store. So it was at a location that I don't live full-time, in our vacation home, so there was a huge disconnect in their process. And I think the reality is, Amazon was engineered ground up as an online delivery company, so their systems are nearly flawless. It's going to take Wal-Mart time to get there. What I would like to see happen is to have more of a way for when there is a problem to expedite that claim, to bounce it up the chain and have some dedicated problem solvers. I think, if I had tweeted at them, I probably would have got a more personal response. Instead, I was just getting the call center script, and my problem didn't fit the script, so it was very difficult. But I don't use that to fault their entire delivery system. I think that's probably an example of an anomaly that they're going to have to figure out.

Shen: Last couple things I'll touch on is, in terms of product selection, the company said it now offers about 67 million SKUs, those are stock-keeping units, on its online marketplace. Meanwhile, on the other end of the spectrum, Amazon, in terms of competition, offers an estimated 400 million products, from what I could find. So, that's a huge gap still.

Kline: It's not, though.

Shen: There's still plenty of room for this e-commerce trend to run broadly. It's still less than 10% of spending. Wal-Mart right now, staking their claim early, is the right move. 

Kline: But do you need 17 kinds of diapers? Or is just four OK?

Shen: Fair. So, all in all, going back to our original call when we talked about this story, it might be too soon, I think, to declare that the Jet.com acquisition was a huge slam dunk with a positive return on investment and everything. But the initial results are pretty encouraging, and it does appear that Wal-Mart has been able to pull someone from outside the company to drive these efforts, and who has the vision and experience in e-commerce in Marc Lore to really ramp up growth in this space. 

Daniel B. Kline has no position in any of the stocks mentioned. Vincent Shen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.