Jetblack Case Study: Walmart’s New AI-Powered Concierge Shopping Service
“Need it. Text it. Get it. Jetblack is the easiest way for busy moms to shop.”
This year, Walmart, the world’s biggest retailer, launched Jetblack – a concierge shopping service that combines ecommerce with a personal shopper experience. Jetblack is the product of Walmart’s Store No. 8 tech incubator, and uses a combination of artificial intelligence (AI) and professional buyers to make shopping recommendations via text.
Seen by many as a potentially game-changing force in ecommerce, Jetblack is designed to provide unparalleled convenience for shoppers through the simplicity of text messaging. However, the service comes with a distinctly non-Walmart touch – a high price – and targets a traditionally non-Walmart audience – upper-income New Yorkers. So, what is Jetblack, what are Walmart’s goals with the service, and what strategies being deployed to achieve them?
Jetblack is Walmart’s brand new personal shopping service that gives customers access to personal shoppers through text message. Officially rolled out in May 2018 after two years in the making, the members-only service – which currently has a waitlist – is available in Manhattan and Brooklyn, NYC. A closed beta version of Jetblack launched in Manhattan earlier in the year.
Jetblack targets upper-income time-strapped urban parents, and combines the convenience of ecommerce with the customized attention of a personal shopping assistant. For a subscription fee of $50 a month, users of the service simply send a text to Jetblack’s AI-powered chatbot – named “J” – saying they need a specific product, and Jetblack’s couriers will source and deliver it the same or next day with no additional charge. Customers can also make a general request for things like birthday gifts, and J will send text recommendations for the customer to select from.
(Image source: jetblack.com)
Jetblack is the first offering to come out of Store No. 8 – Walmart’s Silicon Valley-based tech incubator set up in early 2017 to fund entrepreneurs and launch startups. Store No. 8 provides startups with the necessary capital to bring their concepts to market, and charges them with “changing the course of retail technology innovation” five to ten years into the future.
Co-founded in March 2017 by Rent the Runway’s visionary Jennifer Fleiss and Jet.com Founder Marc Lore – who is now President and CEO of Walmart’s US ecommerce business – Jetblack is headed by Fleiss, who serves as the CEO. She leads a team focused on developing highly-personalized one-to-one shopping experiences for the startup’s customers.
(Image source: jetblack.com)
Fleiss describes Jetblack as the next level of convenience in online shopping. “Consumers are looking for more efficient ways to shop for themselves and their families without having to compromise on product quality,” she said. “With Jetblack, we have created an entirely new concept that enables consumers to get exactly what they need through the convenience of text messaging and the freedom of a nearly unlimited product catalogue. We are confident this service will make shopping frictionless, more personalized, and delightful.”
Shopping by Text – How It Works
New members are on-boarded to the Jetblack service via an initial 10-minute phone call to determine their shopping preferences. They can also choose to have a home visit, where Jetblack employees will arrive and check through cupboards, scan products, and make a note of favorite brands to build a thorough essentials list for daily shopping.
(Image source: jetblack.com)
With the set-up complete, members can then simply text shopping requests to Jetblack, and their orders will be promptly fulfilled. Anything from toiletries and household items to toys and fashion can be ordered with a simple text message. Orders can also be placed via Jetblack-branded Air Pods that run voice-to-text software, which are provided to the user. Alternatively, shoppers can take a picture of a product or capture a screenshot from the web, send the image to J, and Jetblack’s couriers will find it and see that it’s delivered. In addition, if a customer needs a recommendation for a friend or family member’s birthday gift, they can simply ping off a text, and J will reply with a short list of options. From there, a selection can be made, the order placed, and the item will be delivered at the desired location, gift-wrapped and with a handwritten personalized birthday card if requested.
(Image source: jetblack.com)
Jetblack sources products primarily from Walmart and its subsidiary Jet.com, though the company is also working "unofficially" with other retail partners, including Pottery Barn, Gap, Bluemercury, and a handful of other smaller boutiques in New York City. All packages are sent via courier delivery in chic, lightweight, recyclable bags, creating a sense of style, while saving members the chore of having to break down cardboard boxes.
Courting a New Kind of Customer
The launch of Jetblack points towards Walmart’s ongoing effort to court a more upscale consumer. At $50 a month, or $600 a year, it’s certainly a steep price to pay to have your groceries delivered, so it’s safe to say that the service is primarily targeted at those who can afford to pay for convenience – at least at this stage.
The move chimes with a number of other recent updates coming from the Walmart camp. Earlier this year, for example, the Walmart website underwent a complete overhaul, now delivering a more lifestyle-driven experience for customers. Though simplified navigation and a significantly less cluttered homepage are of note, it can’t be ignored that the site is now less focused on low prices and more on the lifestyles of consumers.
Much has also been made of Walmart’s recent acquisitions of more premium-focused brands and websites, such as womenswear site ModCloth, outdoor apparel retailer Moosejaw, and premium menswear brand Bonobos. The largest acquisition, of course, has been Jet.com, which was purchased for $3.3 billion in 2016. Jet.com recently rolled out its own private label brand – Uniquely J. As Walmart put it on its third quarter fiscal 2018 earnings call: “At Jet.com, we continue to position the business to focus on higher- income, urban customers. We launched the Uniquely J private brand and also began selling ModCloth items on Jet this quarter. In addition, we've started to attract more premium brands to the site and we expect this to continue.” For example, the company recently partnered with luxury department store Lord and Taylor to display its merchandise on the Walmart website
(Image source: storeno8.com)
The high-end customer has long been an opportunity for Walmart. The retailer’s discount stores have historically focused on low- to middle-income consumers, and, with a reputation for value rather than quality, it has struggled to court wealthier customers. But, with its recent acquisition spree topped with full ownership of Jet.com, Walmart appears to be on a mission to change that.
Now, with the launch of Jetblack targeting specifically affluent NYC shoppers, Walmart appears once again to be attempting to grab a hold of a market that’s long eluded it. According to 2016 research by Kantar Retail IQ, the average Walmart shopper is a 51-year-old female with an annual household income of $56,482 – which is $13,000 less than that of Target’s and Kohl’s average customers, who come from households earning roughly $69,000. It’s also less than the incomes of shoppers at Amazon at $62,900, Amazon Prime at $69,300, and Costco at $77,400.
All other things being equal, wealthier shoppers are more desirable since they have more money to spend, so targeting this demographic does indeed make strategic sense for Walmart. With regards to Jetblack, with a price tag of $50 per month, the clear targets are upper-income shoppers or two-income households – urban parents who are typically buying ten items per visit and who can afford to pay for convenience. In fact, Jetblack only delivers to buildings with doormen to receive deliveries. However, the question remains as to whether the Walmart connection will impact its potential for success. Although marketed under Jet, some commentators think that Jetblack may struggle from the stigma of being associated with the parent brand, which of course does not resonate with the target customer.
Pete Killian, Partner at brand strategy firm Vivaldi summed up the challenge in Retail Dive. "Arguably, Jet appeals to a younger, more urban, more upscale consumer, but our data does not show they are distinguished on this. All online shoppers are younger and more urban. Jet’s demo[graphic] is not Jet’s brand. Their brand today is not strong enough to reposition Walmart’s in appealing to a new demo. The goal is not to 'avoid association with Walmart' – Walmart's brand is much stronger than 10 years ago – but rather the challenge is how to have Walmart and other brands complement each other."
The Next Level of Convenience – Changing the Way People Shop
The second goal of the Jetblack project is even more ambitious – to fundamentally change the way consumers shop for everyday items. Walmart believes that “conversational commerce” – i.e. the ability to shop through text messaging, online chat, and voice – is the next step in the evolution of ecommerce, and Jetblack is the retailer’s first step towards attempting to realize that vision.
According to Fleiss, reinventing the standard of a delightful digital shopping experience was the initial challenge Lore presented her with when she first joined the team at Store No.8. "That was the big picture dream, and I was given the authority to make that come to life,” said Fleiss. “I always think that as your own consumer you're best positioned to identify a problem and see an opportunity. I am a mom of three young children. Life is busier than ever and I'm constantly looking for different tools to add efficiency to my day. To me, the next version of the delightful digital experience is giving time back and making life more enjoyable. That's where Jetblack came about. The idea is really simplifying the shopping experience with a personal shopper over text – it's as easy as shopping can get."
Conversational commerce has been a buzzword in the retail industry for some time, though uptake by both retailers and consumers is still somewhat slow. A January 2018 Capgemini report surveying people in Western Europe and the US who already use virtual assistants found that just 35% had used a smartphone, smart speaker, or other virtual assistant to buy products, and only 28% to make a payment or send money.
(Image source: emarketer.com)
Even so, both figures being well over one-quarter certainly isn’t insubstantial. Virtual assistants are relatively new on the market, and it would be a good bet to say that as consumers become more comfortable and familiar with the devices, they will gradually become more open to new ways of using them.
This, indeed, seems to be what the industry is betting on. At the end of last year, data from an Econsultancy and Conversion survey found that 40% of ecommerce service providers and 59% of client-side/brand marketers at ecommerce companies were planning to experiment with conversational commerce by 2020.
(Image source: emarketer.com)
(Image source: retail.emarketer.com) For Jetblack, the goal is to lure busy urban shoppers to the service with the promise that conversational commerce will save them time. Jetblack wants to reinvent the shopping experience by eliminating the need for consumers to physically go to stores, lug their purchases home, and even writing a shopping list. “As a parent, you mentally create lists of things you need to buy or do, and instead of putting it on a to-do list and buying paper towels later, you can just text and have a personal shopper take care of it,” Fleiss says. “That lets you be mentally present for your kids or that meeting.”
Jetblack also wants to save members time by conducting purchase research on their behalf. Whether it’s a new TV, a child’s buggy, or a car seat the customer is after, once they’ve pinged off a text message, Jetblack’s algorithms, comparison software, and staff experts get to work parsing through consumer research and rankings, and will reply with the best three options available – eliminating the need for shoppers to page through an endless aisle of product options.
“The internet has given us so many things at our fingertips – you can find everything – and when I search for a stroller, I get 30,000 results and that’s very time consuming,” said Fleiss. “Refining that list has become more important than ever. Customers suck up so much time reading reviews or deliberating over two products that might be identical or might not. Instead, to have a trust in us to narrow the list down to the best three products is really powerful.”
This is how Jetblack is trying to change both the way we shop and the future of the digital experiences. Fleiss believes that ecommerce shopping has become a chore. In fact, she says that the experience is no longer delightful, and that the industry has lacked innovation in recent times. “Many of the things that were innovative five years ago haven’t changed that much, like 2-day shopping and 1-click shopping. We are trying to add efficiency in a way that consumers need. [Gone are the days] when you could discover something that could blow your mind, or the delivery would be so fast and magical, or you get something gift-wrapped beautifully for the gift that you are giving. To bring that emotional connection, joy and light back to shopping is something that we’re doing with Jetblack.”
Utilizing Powerful AI to Get the Experience Right
The new Jetblack service is generating plenty of buzz in the ecommerce sector – not just because many see it as a game-changing force in ecommerce, but also because of the technology behind it. The company is taking a unique approach – utilizing a combination of artificial intelligence (AI) to power the chatbot, and real human intelligence in the form of professional buyers to handle ordering and fulfilment.
However, it’s essential that Jetblack gets the AI side absolutely right if it is to meet its goals. The upper-income busy urban moms the service is targeting have no time to deal with chatbots that don’t understand their shopping requests first time. Only by recreating a high level of conversational fluency that allows users to navigate their shopping choices naturally and intuitively will be helpful, attractive, and winning.
And this is where Jetblack’s AI technology comes into play. By using a text message user interface, Jetblack knows its chatbot’s understanding of shoppers’ requests needs to be accurate, or else its users will quickly lose patience and interest. But capturing shopper intent requires multiple levels of linguistic analysis. The machine must take into account syntax, semantics, and pragmatics (i.e. the underlying purpose or goal of the text message) in order to provide a useful response.
Utilizing machine learning, natural language processing (NLP), natural language understanding (NLU), and personalization algorithms, Jetblack makes sure that if users order, for instance, a “red dress shirt”, they get a red shirt and not a red dress delivered to their doorstep. In addition, the more customers use the Jetblack service, the faster it gets, and the more the chatbot learns about the customer’s personal preferences. If a user needs breakfast cereal, detergent, diapers, shampoo – you name it – he/she simply texts the words, and not only will the products be delivered, but they will be the customer’s preferred brands.
To effectively win over and respond to the needs and expectations of its target customers – however nuanced their shopping requests may be, or however niche the products they desire – Jetblack’s chatbot needs to understand more than just words, but context and intention as well. By leveraging the very latest in emerging machine learning and NLP technologies, Jetblack is trying to build the most effortless and customized shopping experience possible.
Bringing the Human Touch Back to Ecommerce
Importantly, Jetblack bills itself as a “personal shopping service” – and even with all the technology in the world, it’s impossible to deliver on this promise without the personal touch. Recognizing this, Jetblack decided early on to add a layer of human intelligence, personalization and expertise to the experience it was creating. It was a wise move. As technologies such as automation and chatbots like “J” continue to rise, consumers still crave the human touch. According to PwC’s 2018 “Experience Is Everything” report, 75% of global consumers and 82% of Americans said they wanted more human interaction from brands, not less, and 64% said they felt companies have lost touch with the human element of the customer experience.
(Image source: pwc.com)
Aware of these trends, Jetblack was designed from its beginnings to pair real human intelligence with AI and machine learning. The human beings are professional buyers across the home, health, parenting, fashion, and wellness categories. The Jetblack concierge team is also on call from 7am to 11pm seven days a week. When orders are placed via the Jetblack chatbot, these buyers set to work sourcing the items and getting them ready for personal delivery.
And it’s not just home delivery either. Jetblack will rush beach essentials to a family on vacation, deliver to offices, or anywhere else in the entire US, according to the Jetblack website. They will also curate special gift items on behalf of members, such as custom Easter baskets which are delivered once the children are asleep, as well as birthday and other holiday gifts.
While Walmart and its subsidiary Jet.com are the primary sources for the items, the service will also source through other retailers. This large-scale brand indifference ensures that customers will get the exact items they need, whether Walmart provides them or not. Indeed, it’s important to note that the retailer defines Jetblack as a “stand-alone startup”, as opposed to simply another Walmart fulfilment channel. Jetblack is a personal shopping service, and delivering convenience (rather than Walmart goods) is its ultimate purpose.
Jetblack's Outlook for the Future
Walmart’s mission to attract a more upscale customer has taken a decisive turn with the launch of Jetblack. The service-rich model combines high-touch personalization and the power of exclusivity – Jetblack is members-only and invite-only – to lock high-value upper-income shoppers into a relationship that will be difficult to break. Though it’s still early days for the service, Jetblack is certainly raising the stakes on building customer loyalty. If it can deliver on its goals and keep those busy urban parents fulfilled and satisfied, then they will clearly be getting more from Jetblack than they currently can from any other provider, and will continue to concentrate their spending via the service.
Early signals indicate general satisfaction so far, and there are currently thousands on the waiting list to join, according to reports. “This service has been an absolute game-changer for me, making it SO easy to find and purchase the things I need for myself and my family,” said one Jetblack member. “Specifically, the ease of use (love that it’s text-based not an app) and that it saves me money and time eg: not having to go through check-out process, not having to print/package/process returns, eliminates time researching gifts, etc. It’s amazing.”
Though a chatbot-powered online concierge service may look like a niche offering right now, its ultimate goal of making shopping easier and more delightful than ever before has broad implications for all retailers. If the service proves to be a success and a large-scale, possibly country-wide, roll-out follows, the pressure will then be on all other competitors to match it – a new era of convenience commerce will be ushered in, and Jetblack will have succeeded in changing the way we shop.
The results of this experiment will be closely watched, for they may very well portend a new smarter and nimbler ecommerce industry that relies less on clicks and scrolls, and more on personalized services delivered right to your front door, complete with the human touch.
This, indeed, is Marc Lore’s vision. "Through Store No. 8 and Jetblack, we're able to build and test technology that can lay the foundation for capabilities we believe will have a profound impact on how customers may shop five years from now. Powered by conversational commerce, the future of retail will bring convenience and high-touch personalization to the forefront for consumers everywhere."