You can consult the MSNBC story if you’d like, but the basic idea isn’t that complicated. Wal-Mart has
been beta-testing a new personal shopper service, which they call Jetblack, in
New York for the last few months. Updating the concept a bit, the Wal-Mart
version includes the ability to put in shopping orders by text message, upon
which your personal shopper will text back pictures of various options for your
consideration. Jetblack service will include messages to the user from their
personal shopper regarding special deals, sales, or other opportunities, which
could in theory keep you from having to read Wal-Mart advertising or keep track
of upcoming sales. The service will also provide access to merchandise from
other retailers, with Saks and Pottery Barn listed in the initial wave, and
others to come…
The big question, as I see
it, isn’t so much whether customers who fit the primary demographics for
Wal-Mart will be able to afford $50 per month for a shopping service, or even
if they would want such a thing in the first place; Wal-Mart does have some
higher-end customers, and they wouldn’t need all that many of them to make a
personal shopper service viable. The issue is whether Wal-Mart can develop
enough of a presence in high-density population centers to make such a service
profitable. The company avoided big cities, and even larger towns, for many
years and has had trouble establishing itself in urban areas even when it tried
to change that focus. Going into a city means more expensive real estate,
higher operating costs, and far more competition than the company has traditionally
faced or wanted – but in order to make a personal shopper service work they may
have to crash some of those larger markets…
Now, we should probably note
that despite all of the jokes made at their expense (see the People of Wal-Mart
site if you don’t believe me), Wal-Mart is still the largest retail business in
the world, and there isn’t much question that they could enter whatever markets
they would need to in order to reach customers for the Jetblack service. It
also seems possible that they could offer the service in parts of the country
where they don’t actually have any retail store presence – all they really need
for this is a warehouse to store their merchandise and a set of delivery
personnel (and vehicles) fancy enough to qualify as “white-glove” to their
customers. This is essentially the same model that Amazon is using for its
real-time home delivery business, and that seems to be working so far. Wal-Mart
should probably stay away from delivery drone technology, though…
Wal-Mart could also try to
expand their shopping service to include groceries; this would take them into
competition with companies like Hello Fresh and Fresh Direct, but it would also
give functionality to their service that companies like Nordstrom’s and Macy’s
can’t offer. A more interesting question is how they will do against Amazon
Prime, which doesn’t (yet) offer as much personalized service, but is about
four times cheaper, and has access to even more products than Wal-Mart. The whole
business model might seem a bit bizarre to people who are only familiar with
Wal-Mart as a small-town retailer frequented mainly by rednecks, but in a world
where Amazon is opening brick-and-mortar stores and at least two other
companies are selling cars from vending machines, it’s getting harder to say
what is surprising anymore…
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