Dive Brief:
- Walmart has replaced Jenny Fleiss as the head of its text-based concierge shopping service Jetblack, according to the company. Taking her place as JetBlack CEO is Nate Faust, a senior vice president of supply chain and logistics with Walmart's e-commerce unit and co-founder of the Jet e-commerce site.
- Fleiss had come to Walmart from Rent the Runway, which she co-founded. At Walmart, she is taking an advisory role to Walmart's Chief Customer Officer Janey Whiteside, while also acting as an advisor and spokesperson to JetBlack, according to a Walmart spokesperson.
- According to Bloomberg, which first reported Fleiss's replacement, the management change could be preparation of a spin off of Jetblack. The unit is reportedly losing in the range of $10,000 to $15,000 on each of its members.
Dive Insight:
Bloomberg reported in September that Faust was likely to take over Jetblack in the event of a sale or spinoff of the unit, which looks ever more likely.
According to reports from Bloomberg and The Wall Street Journal, Walmart has been exploring a partnership, spinoff or sale of Jetblack as it racks up profit losses and struggles to build a large audience beyond doorman buildings in New York City. The Journal reported that possible partners could include Microsoft, UPS and venture capitalists.
Jetblack's upper income clientele represent a departure from Walmart's core business, which has a scant physical presence in the dense urban areas that Jetblack was designed for.
The service, launched officially last year, uses both artificial intelligence and humans to offer curated recommendations, in addition to courier delivery pickup for returns, free gift-wrapping and other services. Marc Lore, Walmart's e-commerce chief and co-founder of Jet, told employees and shareholders this year that Jetblack members engage weekly and spend an average of $1,500 a month.
But apparently that's nowhere near enough to make the venture profitable.
The exec shuffling at and possible divestment of Jetblack comes amid broader upheaval throughout Walmart's digital business. The retail giant recently sold off the online vintage-themed retailer ModCloth, which Walmart acquired in 2017. The retailer has also considered the sale of other recently acquired banners as it faces a $1 billion loss in its e-commerce business, according to Vox's Recode.
Those acquisitions were paired with Jet to boost the e-commerce site's offering and better compete with Amazon. But since acquiring Jet in 2016, Walmart seems to have sidelined the unit to focus on its Walmart.com platform.
The company has axed Jet's independent executive role and pulled back on marketing spend for Jet. As a result of the latter, Jet has lost around 93% of its traffic since September 2017, according to Gartner L2 data.
