Please ensure Javascript is enabled for purposes of website accessibility

Can Jet.com Woo Millennials With Private-Label Brands?

By Danny Vena - Oct 7, 2017 at 10:20AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Jet.com is targeting millennials customers with edgy and fun new private-label brands. Will it work?

When Wal-Mart Stores, Inc. (WMT 0.86%) announced the purchase of online retailer Jet.com late last year, it announced to the world that it was no longer going to sit by and let Amazon.com, Inc. (AMZN 3.15%) dominate the world of e-commerce. What followed was a whirlwind of smaller online acquisitions, including men's clothier Bonobos, woman's fashion purveyor Modcloth, and outdoor retailer Moosejaw. The company also made it easier for online customers to order its most popular items -- over a million in all -- and pick them up from a Wal-Mart store, with many available on the same day.

Recent results show that those moves are paying off. In its most recent financial report, Wal-Mart revealed that its online sales increased by 60% year over year, while its gross merchandise volume jumped 67% over the prior-year quarter.

Wal-Mart knows it can't rest on its laurels, and it's preparing another salvo in the ongoing battle. Jet.com will launch a private-label brand in a bid to woo millennials.

Jet.com's Uniquely J Coffee Bar Blend Ground Coffee.

Jet.com is targeting millennial shoppers with its edgy private-label brands. Image source: Jet.com.

The battle rages

Wal-Mart is the world's largest retailer, generating $490 billion in sales over the past 12 months. Amazon is the world's largest online seller and tenth largest retailer worldwide selling $150 billion over the same period. It has been gradually chipping away at Wal-Mart's retail dominance, and its recent purchase of Whole Foods placed the online merchant into direct competition with Wal-Mart's grocery business.

Amazon's first move after the acquisition was to lower prices on a host of items at the beleaguered chain, which had garnered the nickname "Whole Paycheck" for its high prices. That move appeared to bear fruit, as a report by analytics firm Thasos Group reported that traffic increased 17% in the first full week following the price reductions. The analysis also revealed that 24% of Whole Food's new customers were Wal-Mart shoppers.

Box with snacks with wild cartoonish drawings and sayings like "nom nom" and "emergency snack kit".

Jet.com thinks boldly designed packaging and witty label copy will capture the attention of millennials. Image source: Jet.com. 

Uniquely J

Wal-Mart is firing back with a move aimed directly at millennial shoppers, which now account for the largest segment of the buying public. Jet.com has confirmed to The Motley Fool that over the next few months, it will launch a private-label brand, called Uniquely J, "a brand designed for metro millennial consumers." This will allow the e-commerce site to compete with Amazon on price for a wide range of everyday items that shoppers buy the most.

"The thoughtfully curated selection of products will include essentials like coffee, olive oil, laundry detergent, paper towels, and more," according to an emailed statement. Jet.com spokesperson Meredith Klein, Director of Public Relations, went on to say that the brand would incorporate "boldly designed packaging" and "fun, witty label copy" combined with quality ingredients "designed with this metro consumer in mind":

Uniquely J brings together everything our customers care about -- from quality to design and beyond -- without trade-offs. Instead of focusing in on any one aspect of product development, we've created a uniquely valuable brand experience that will speak to the metro millennial lifestyle.

Wal-Mart had previously begun offering its own private-label brands -- Equate, Sam's Choice, and Great Value -- on the Jet.com website, but those brands proved unpopular with younger shoppers. To combat that trend, Uniquely J products will aim for better quality, like providing higher-end items like organic and fair-trade coffee.

Jet.com's Uniquely J Organic and Fair Trade Peruvian Coffee Single Serve box with an artistically rendered lion.

Jet.com hopes higher quality and lower prices will attract millennials. Image source: Jet.com.

Higher quality and better margins

The move to add brands that resonate with millennials will accomplish several strategic goals. Wal-Mart has been targeting millennials shoppers and told analysts last year that two thirds of adults between the ages of 20 and 35 had shopped at a Walmart store in the prior month. Steve Bratspies, the company's chief merchandising officer said that millennials were "the most value-driven generation that we've seen in my lifetime. They are very focused on value, which aligns well for Walmart."

In addition to providing better margins, edgy and fun private-label brands may appeal to a somewhat broader segment of shoppers, rather than just millennials, and they may even help prove to shoppers that this isn't your grandfather's Wal-Mart.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$122.63 (0.86%) $1.05
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$109.56 (3.15%) $3.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.