Walmart to phase out Jetblack online shopping service

Walmart next week plans to discontinue its Jetblack concierge-style online shopping service, which will be absorbed by the retail giant’s broader e-commerce operations.

Plans call for Jetblack, launched in mid-2018 by Walmart technology incubator Store No8, to shut down on Feb. 21. Serving parts of New York City, the members-only service enabled customers to text almost any shopping request — including food and groceries — and Jetblack would find the right products and deliver them the same day or the next day for no extra charge.

Jetblack was the first business hatched by Store No8, formed in early 2017 to help Walmart drive e-commerce innovation and digital shopping solutions. The incubator debuted just months after Walmart closed its acquisition of Jet.com and named Marc Lore, the e-tailer’s founder and CEO, to head U.S. e-commerce efforts.

Scott Eckert, senior vice president for next-generation retail and principal at Store No8, announced the phase-out of Jetblack yesterday. The Wall Street Journal, which previously reported that Walmart planned to cease the Jetblack service, said most of the operation’s 350 employees will be laid off under the shutdown. Efforts by Walmart to spin off Jetblack and land investment partners proved unsuccessful, the Journal said.

Related:Walmart pilots concierge-style online shopping in New York City

“Since launching Store No8 three years ago, one of our primary goals has been to launch new capabilities that can grow and be fueled by the Walmart engine, eventually shaping how we serve customers in the future. They may not scale to everyone today, but rather lay the foundation for capabilities that we believe will have a big impact on how customers shop tomorrow,” Eckert said in a blog post on Thursday. “A recent example of this is InHome, which has grown as a stealth company from infancy to a pilot program that can truly change the way customers shop, by not only picking and delivering groceries but taking them all the way to their refrigerators. Today, Jetblack, the first portfolio company to launch from Store No8, follows InHome as the latest to graduate from incubation to join Walmart’s customer organization.”

Jetblack targeted affluent shoppers, providing on-demand access to category experts, free gift-wrapping and handwritten gift cards.

Upon Jetblack’s launch, Walmart described the experimental service as a pioneer of “conversational commerce,” or the ability to shop via text messaging, online chat or voice. Serving as a virtual personal assistant, Jetblack leverages artificial intelligence practices and expertise from professional buyers to provide curated shopping recommendations sent via text.

Daily essentials ordered via Jetblack were sourced from Walmart and Jet.com, and other items and specialty products were procured from local brands and shops, Walmart reported. Delivery, by courier, was free, carried no minimum order amount and had same- or next-day fulfillment. As reflected by its pilot location of Manhattan, Jetblack targeted affluent shoppers, providing on-demand access to category experts, free gift-wrapping and handwritten gift cards, competitive pricing and pickup service for returns.

Related:What’s in a name? JetBlue files suit against Walmart’s Jetblack

“We’ve learned a lot through Jetblack, including how customers respond to the ability of ordering by text as well as the type of items they purchase through texting. We’re eager to apply these learnings from Jetblack and leverage its core capabilities within Walmart,” Eckert explained in the post. “As we said in the beginning when we launched Jetblack, part of the initiative was to start testing and building technology with the intent that it could be used in other ways, including applying it to other parts of our business. Over the past few years, we’ve explored a number of areas in conversational commerce, from Jetblack’s text-based ordering to voice ordering in [Walmart Grocery] Pickup and Delivery, all with the belief that this technology will be an important way Walmart serves customers in the future.”

A leadership change at New York-based Jetblack had raised questions about the future of the service. At its launch, Jetblack was led by co-founder and CEO Jenny Fleiss, who helped start online fashion rental service Rent the Runway. But last fall, Bloomberg reported that Walmart replaced Fleiss with Jet co-founder Nathan Faust, senior vice president of supply chain and logistics for Walmart U.S. eCommerce.

“After nearly two years in New York City, Jetblack has ended our current operations. Our technology will be rolling into Walmart to power its conversational commerce capabilities and build new experiences for customers,” Jetblack said in a message on its website. “We are servicing any outstanding orders and inquiries for customers through Feb. 21, 2020. After this date, we are upholding our 30-day return policy through March 14, 2020.”

Earlier, Walmart signaled that it aimed to fold its digital retail initiatives into its core U.S. e-commerce operations. Last June, Lore announced plans to incorporate Jet.com into Walmart’s mainline e-commerce business. Then this past November, Walmart confirmed reports that it was closing its Jet City Grocery service, after just over a year in operation.

“We are only beginning to explore how the capabilities being developed within Store No8 can complement one another and be leveraged to enhance the customer experience,” Eckert added in his blog. “We look forward to sharing more updates from the team as we work together to shape the future of retail at Walmart.”