Dive Brief:

• E-commerce startup Jet, now owned by Wal-Mart, is bringing in a slew of Wal-Mart brands, including “Great Value,” “Equate” and “Sam’s Choice,” to bolster its relatively thin assortment, Bloomberg reports.

• The move has been made possible by the merging of Wal-Mart’s fulfillment system and Jet’s operations, according to the report. A request to Wal-Mart for more details from Retail Dive was not immediately returned. 

• The decision to add the brands comes amid other reports that Wal-Mart is more closely aligning its e-commerce assortments and fulfillment operations with its brick-and-mortar operations. 

Dive Insight:

Thanks to its vast brick-and-mortar retail network, Wal-Mart is arguably the biggest distributor of goods, although its online assortment still pales in comparison to that of Amazon. With Wal-Mart's fulfillment network now in place for Jet's e-commerce site, the upstart will begin to benefit from Wal-Mart’s massive merchandising.

Jet’s assortment also doesn’t even come close to rivaling that of Amazon, according to a study last year conducted by Boomerang Commerce for Business Insider. But Jet (and even Wal-Mart, whose e-commerce, despite heavy investments and major recent changes, still accounts for about 3% of sales), has other issues to contend with — starting with price. 

Jet failed to beat Amazon on price on 44% of 331 best-selling items, undercutting its rival just 16% of the time, according to that Boomerang Commerce/Business Insider study. Jet’s prices were 16% higher overall, researchers found, and its price competition was weaker in this study (conducted after Wal-Mart’s $3.3 billion acquisition of the e-commerce newcomer was announced) than in a similar one conducted by Boomerang for the Wall Street Journal in September of last year. In that study, Jet was cheaper on 73% of items and Amazon was cheaper on 24%, though Amazon was 3% cheaper on average.

Those numbers don’t take into account Jet’s “secret sauce,” its algorithm-boosted dynamic pricing model that many believe was the shiny object that attracted Wal-Mart to it. For Jet, it translates to a discount of 5% for the average basket. But even factoring in that discount, Amazon still beats on price, Business Insider said. Similarly, analytics firm Ugam found that this past holiday season Amazon carried more trending toys and electronics than Wal-Mart and Jet combined. Amazon also offered the lowest (or tied for the lowest) prices on more toys and electronics than Wal-Mart and Jet. 

Attracting new customers is another problem for Wal-Mart and Jet, says Profitero VP of strategy and insights Keith Anderson. “The one challenge I see that is going to be a big complexity for Wal-Mart and Jet is that they need to acquire a lot of customers,” Anderson told Retail Dive. “Jet spent exorbitantly” without gaining much traction, he added.

The fact that Amazon not only has more products but also better product information, including reviews, makes that harder, he said. “The challenge for Jet is still going to be competing on selection and site experience at a level that first those price-conscious, price-primary [shoppers expect],” he said. “For the people for whom the absolute price and absolute value is the single biggest decision factor.”