Dive Brief:
- Walmart is discontinuing service for its Jet Black members in New York City on Feb. 21, a company spokesperson told Retail Dive in a statement.
- That is part of a broader effort to move Jet Black from "incubation" to Walmart's broader customer organization, the spokesperson said. Once the service to members is discontinued, "we'll focus on how to leverage Walmart's infrastructure to make conversational commerce scalable," the spokesperson said.
- According to The Wall Street Journal, which first reported that Jet Black would transition away from a service model, Walmart had been in talks around a possible spin-off of the unit, but it ended without a deal.
Dive Insight:
The end of Jet Black as a high-end, tech-based concierge service for upscale urbanites follows the retail giant's larger pivot around e-commerce and tech.
After acquiring e-commerce site Jet in 2016, the company bolted on several acquisitions of savvy online players, including ModCloth and Bonobos, as a way to increase the value of Jet's offering. Since then, Walmart has sold off ModCloth and other digital brands have gone through job cuts.
Jet Black was launched in 2018, in that period, as a way to bring high-level convenience to shoppers in dense urban areas, who have been out of the reach of Walmart's stores. The service uses both artificial intelligence and human know-how to help shoppers. Today it offers curated recommendations, courier delivery, pick-up for returns, free gift-wrapping and other services.
But the shop-by-text service never made it out of New York, and multiple news outlets have reported that Walmart was losing money on the service. Last fall, Jet Black went through a leadership change, with Jenny Fleiss, who was recruited by Walmart e-commerce chief Marc Lore from Rent the Runway, replaced by Nate Faust, senior vice president of supply chain and logistics with Walmart's e-commerce unit and co-founder of the Jet e-commerce site.
As with Jet.com, which Walmart appears to have pulled back on in order to focus on its namesake site and broader digital operation, Jet Black and its technology will be folded into Walmart's larger business.
"We've learned a lot through Jet black, including how customers respond to the ability of ordering by text as well as the type of items they purchase through texting," Scott Eckert, Walmart senior vice president and head of its Store No. 8 incubator, said in a company blog post. "We're eager to apply these learnings from Jet black and leverage its core capabilities within Walmart."
He also noted that Jet Black was launched with the intent of using it in other ways and applying it to other parts of Walmart's business.
