When Walmart Inc. (NYSE: WMT) kicked off its Jetblack personal shopping service in 2017, the $50-per-month membership fee was not aimed at its average customer. The idea, born in the company’s technology incubator, had been tested in New York and was available by invitation at doorman buildings in Manhattan and was about to be extended to non-doorman buildings as well.
Now the company is looking to shed some or all of the program and has been discussing a spin-off or sale with investors (likely private equity) and other companies in the “last-mile” delivery business including, sources told The Wall Street Journal, a logistics company and a payment company.
The service, still limited to New York City, has signed up about 600 active members, according to The Wall Street Journal, and each one of those is costing Walmart about $15,000 annually. Walmart has claimed that Jetblack customers spend an average of $1,500 a month on the service.
The Jetblack service is not limited to items available only at Walmart stores. Personalized service and same-day delivery were also available from Saks, Sephora and other retailers, along with free gift-wrapping and same-day delivery. The service’s scores of agents respond to text messages requesting products and then send out more employees to purchase the items and take them to the delivery hub where they are wrapped and delivered the same day.
One of the major issues revolved around Jetblack’s promise to purchase products at the lowest available price with fast delivery. That meant products often had to be purchased at a non-participating store, including Amazon, where Jetblack has a Prime account. Jetblack often had to charge customers less for the item than it had to pay for them.
The upside to Jetblack is its ability to collect preferences from high-income customers that could then be used to drive more purchases. Last March, Jetblack CEO Jenny Fleiss told The Wall Street Journal that all those agents were gathering data “to train an artificial intelligence system that could someday 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.”
That is where the value of Jetblack resides and that is what Walmart has been looking at selling to potential buyers of the service. Figuring out what Jetblack is worth is the tricky bit.
Fleiss gave a timeline of five to seven years before the system could be mostly automated. She is also reportedly going to step down as CEO of Jetblack as part of any spinoff. Fleiss was a cofounder of apparel rental company Rent the Runway and joined Jetblack in 2017.
On a down-trending Monday morning in the markets, Walmart shares traded about 0.8% lower, at $117.25 in a 52-week range of $85.78 to $119.86. The 12-month consensus price target on the stock is $119.57.
24/7 Wall St.The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.