Please ensure Javascript is enabled for purposes of website accessibility

Walmart Closes JetBlack White Glove Concierge Service

By Rich Duprey – Feb 18, 2020 at 10:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's a surprise to no one but the retailer that the upscale service didn't catch on.

Give Walmart (WMT 1.57%) credit for continuously trying to punch up, but the retail giant really should just learn to stay in its lane. The well-heeled are just not its target demographic.

That the discount retailer is throwing in the towel on JetBlack is no surprise, as it was always doubtful its white glove concierge service would attract many customers, so maybe Walmart finally realizes its discount branding really doesn't appeal to an upscale audience. I wouldn't bet on it, but this latest experiment for busy, rich people is done anyway.

Waiter serving up a city on a platter

Image source: Getty Images.

Air of exclusivity

It was certainly a brash experiment for Walmart. For $50 a month, the hoity-toity could call or text the JetBlack service with the items they wanted to buy, and through a combination of artificial intelligence and personal shoppers, the retailer would search out the merchandise and deliver it free of charge. 

The brainchild of Jenny Fleiss, the co-founder of the luxury fashion goods rental service Rent the Runway, JetBlack was developed within Walmart's technology incubator Store No. 8 and unleashed on Manhattan in 2018. It marked yet another attempt in a long list of efforts by the retailer to attract younger, urban, and more affluent customers.

Although Walmart has gone after this demographic several times, it has never done so very successfully. 

Try, try again

Over a decade ago, Walmart saw the success Target was having with designer fashions and launched its own trendy clothing lines from Max Azria, Norma Kamali, and others. Walmart even opened an office in New York's fashion district.

Needless to say, it flopped. Much like the JetBlack service, consumers who buy designer clothes don't shop Walmart for them, and the large majority of its customers who look to the retail giant for the best prices on products were put off by the high prices it was charging for the designer duds.

It was forced to end that experiment and had to woo back the customers it chased away with a big marketing campaign about returning to everyday low prices.

It tried once more to get away from being the place for rock-bottom prices a few years ago by introducing dynamic pricing as a means of staying competitive with, but that too was a failure. Having prices fluctuate based on time of day, demand, location, competition, or buying patterns really didn't sit well with Walmart's customers, and then-CEO Doug McMillan said the retailer was going back to its roots by "playing offense with price" so it could reconnect with its customers.

Another costly lesson

While it's said the burned hand learns best, Walmart seems willing to apply the salve and try again, perpetually thinking its brand will one day appeal to the well-to-do. JetBlack was another lesson that such is not the case.

The concierge service never had more than a few hundred customers, and though Walmart's CEO Marc Lore told shareholders at the last year's annual meeting that two-thirds of the clients engaged with JetBlack weekly and spent on average $1,500 a month, they actually caused the retailer to lose $15,000 annually on each of them.

We already had a sense the end was near for JetBlack as Walmart was reportedly looking for a way out last year, deciding whether to sell it, spin it off, or partner with another business. Apparently no one else thought it was a very good idea because it's now being shut down.

Although it's admirable Walmart tries to appeal to a greater cross-section of the population, at some point it needs to realize consumers shop its stores because they're trying to get the best bang for their buck, not to have their shopping carts delivered to them on a silver platter.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Walmart Stock Quote
$133.01 (1.57%) $2.06
Target Corporation Stock Quote
Target Corporation
$156.39 (5.33%) $7.92, Inc. Stock Quote, Inc.
$117.27 (2.50%) $2.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.