Why did Jet.com’s fresh delivery service go stale in NYC?
Only a year after launching its Jet City Grocery fresh food delivery service in New York City, Jet.com’s parent company, Walmart, is ending the experiment.
The service, intended to cater to busy urbanites, allowed for same- and next-day delivery of a range of grocery essentials, according to Supermarket News. Most distinctive was its business relationship with respected local vendors, providing customers products from artisanal retailers such as Bedford Cheese Shop, Orwashers Bakery and, maybe most ambitiously, fresh fish from Fulton Fish Market in Manhattan. The service also partnered with the meal kit company, Blue Apron.
Jet City Grocery experienced frequent out-of-stocks and operational difficulties from the outset and the company was also forced to raise prices. With the end of the service comes the closure of a 200,000-square-foot fulfillment warehouse, which opened last year, and the cutting of 200 to 300 jobs.
An account of the Fulton Fish Market relationship reported by Mobile Payments Today gives an idea of how easily supply chains for fresh food delivery might run into stumbling blocks. Fish was received at the Market in Manhattan between 10 p.m. and 2 a.m., then delivered to the Jet City Grocery fulfillment center in the Bronx by 8 a.m., where it was available for same-day delivery between 6 p.m. and 9 p.m. to those who ordered before noon.
Jet.com has experimented with other attempts to unseat food delivery incumbents since being acquired by Walmart. In 2016, shortly after Walmart’s acquisition of the e-tailer, it announced the rollout of a membership-free food delivery service in a few East Coast markets, which put it in competition with Amazon Fresh.
Amazon Fresh, for its part, has also had trouble getting fresh food delivery right.
In 2017, Amazon announced that it was cutting down the number of markets where it offered its Amazon Fresh service, although it remains available in a few major urban markets, including New York City. The move came as a shock to many who speculated that the e-tail giant would be leveraging Whole Foods’ brick-and-mortar footprint to improve its fresh food delivery capabilities.
- Walmart closing Jet.com NYC fresh grocery delivery service – Supermarket News
- Will Jet.com’s online fresh grocery pilot crash or soar? – RetailWire
- Amazon scales back fresh deliveries – RetailWire
- Jet City Grocery teams with Fulton Fish Market on seafood delivery – Mobile Payments Today
DISCUSSION QUESTIONS: What can retailers learn from the Jet City Grocery failure and how might they apply it to their own fresh delivery initiatives? What does this mean for the viability of Jet.com as a standalone e-tailer, and what do you think Walmart’s long-term plan is for the Jet.com website/brand?