Walmart to Scale Back Jetblack After Investor Talks Fizzle -- Update
February 13 2020 - 10:35AM
Dow Jones News
By Sarah Nassauer
Walmart Inc. is restructuring its Jetblack personal shopping
service, as some of the talks it held with potential investors last
year have ended, according to people familiar with the
situation.
The New York City-based unit, which offers fast product delivery
through text message, plans to rebrand and in coming months would
cease to be a personal-shopping service, some of these people said.
Its technology could be moved within Walmart, they said.
Last year, Walmart worked to spin off the unprofitable unit,
which had less than a thousand customers as of last year. The
retailer discussed an investment with several potential partners
including Microsoft Corp., and venture-capital firms including New
Enterprise Associates, The Wall Street Journal reported at the
time.
Those talks have ended, some of the people said.
Jetblack's chief executive Jenny Fleiss left last year,
succeeded by Nate Faust, Walmart senior vice president of
e-commerce logistics, who had previously worked for Jet.com, the
e-commerce startup Walmart bought in 2016.
Jetblack was launched publicly in 2018 as part of an innovation
arm at Walmart dubbed Store No. 8, where the company intends to
build technology and business units that aren't immediately
profitable but could be integrated into the larger company in the
future.
Walmart executives have talked about Jetblack as a potential
avenue of growth and research, not as a profit center. As of last
summer, Jetblack was losing about $15,000 per member annually, the
Journal reported.
Jetblack members pay $600 a year to order anything except fresh
food by text message. Their orders go to a Jetblack office where
agents sitting at computers field customer requests, from diaper
reorders to requests for suggested yoga attire. Couriers fetch the
items so they can be hand delivered, usually the same day.
Walmart was using Jetblack's human agents to train an artificial
intelligence system that would some day power an automated
personal-shopping service, preparing Walmart for a time when the
search bar disappears and more shopping is done through
voice-activated devices, Ms. Fleiss said last year.
Walmart, which reports quarterly earnings next week on Tuesday,
has worked to stem losses from its smaller e-commerce units over
the past year, selling units or cutting staff in those businesses.
Walmart folded most of the remaining Jet.com staff into the rest of
its operations last year and laid of workers at Bonobos, the men's
apparel retailer it owns.
Last month Walmart closed the Omaha corporate headquarters of
Hayneedle, the online furniture site it inherited along with
Jet.com. "We are integrating the Hayneedle business" within Walmart
but keeping the website open for business, a spokeswoman said
earlier this month.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
February 13, 2020 10:20 ET (15:20 GMT)
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