Jetblack Could Change Walmart Shopper Stereotypes

Walmart makes a bet on conversational commerce that costs $50 per month

Author: Krista Garcia

May 31, 2018

Walmart unveiled a new, highly personalized service that comes with a distinctly non-Walmart touch—a high price. And the service is aimed at a distinctly nontraditional Walmart audience: upper income New Yorkers.

During a Thursday media event tied to Walmart’s annual shareholder meeting, the company officially announced its $50 per month Jetblack program, catering to New Yorkers. Members will have preferences assessed through a phone call or home visit and then will be able to make purchases via text on the fly. Same-day delivery will be available for most orders placed before 2pm, with purchases fulfilled through Walmart, Jet.com and other retail partners.

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When Walmart went on an online acquisition spree in 2016, buying Jet.com for a record $3.3 billion, it was seen as an expensive bid to expand its upper-income customer base. In a Q4 2017 earnings call, Doug McMillon, president and CEO of Walmart, admitted that the lucrative customers it wanted to attract with Jet.com were expensive to acquire, and that the company was starting to limit marketing to select urban areas.

The irony is that residents of New York City have long opposed the opening of a Walmart store—though the oft-cited stat that 90% of the US population lives within 10 miles of one holds true, since the closest location to Manhattan is roughly 6 miles away in Secaucus, New Jersey. Regardless, Walmart has been infiltrating New York through digital means, with no need to build a big-box in the five boroughs.

If Jetblack's barrier for entry seems exclusionary, that's because it kind of is. Membership is still invitation-only, and deliveries are currently restricted to doorman buildings in Manhattan and parts of Brooklyn. However, Jetblack isn't being sold as a purely transactional ecommerce platform, but as a personalized service that will provide tightly curated recommendations based on the combination of human taste and artificial intelligence (AI).

It is notable that the phrase "conversational commerce," defined as "the ability to shop through text messaging, online chat or voice," was used multiple times in Walmart's press materials. Conversational commerce has been a buzzword for some time, but uptake by both retailers and consumers has been slow.

A November 2017 Capgemini survey of people in Western Europe and the US who already use virtual assistants, 28% said they had used a smart speaker or smartphone virtual assistant to make a payment or send money.

This was the least common activity, far less popular than asking for information like weather or news (82%) and playing music or videos (67%), though a figure over one-quarter isn’t insubstantial. It’s a good bet that consumers who already own smart speakers and use virtual assistants are more open to new ways to use them.