BRIEF

Jet to open Bronx fulfillment center for NYC push

AUTHOR

Daphne Howland@daphnehowland

PUBLISHED

July 10, 2018

SHARE IT

•  POST
•  SHARE
•  TWEET

First Published on

Dive Brief:

• Walmart-owned Jet.com is opening a fulfillment center in the Bronx New York City borough this fall, which the company said in a press release will facilitate deliveries in the New York City area.
• The Bronx fulfillment center will house only Jet inventory, including groceries, household essentials and general merchandise, and will leverage Parcel to support last-mile delivery. Walmart bought the New York City-based delivery service last fall. 
• The move follows the March appointment of former Tesco executive Simon Belsham to be Jet’s new president, a hire widely seen as a sign of Jet’s grocery sales ambitions. 

Dive Insight:

Jet, based in Hoboken, New Jersey, increasingly appears to be Walmart's scheme to push into New York City.

While Walmart has historically had a slim presence there, Jet has heavily marketed itself in the city for years now. Through efforts like its experimental shopping service "Jetblack," Walmart is now doubling down on services that appeal to busy, wealthy New Yorkers.

Plenty of analysts, and even Walmart executives (not least CEO Doug McMillon), say that Jet allows Walmart to accomplish something it has found to be difficult for decades — appealing to younger, better educated, higher income urban professionals.

But it's not all that simple. McMillon is tightening up the purse strings when it comes to Jet's customer acquisition investment. For example, in March he told analysts that the retail giant has "been investing more in Walmart.com on a national basis and reducing marketing investment in Jet, except in certain urban markets," according to a transcript from Seeking Alpha. 

That appeal to younger more urban consumers isn't necessarily definitive, according to Pete Killian, partner at brand strategy firm Vivaldi. "All online shoppers are younger and more urban. Jet’s demo is not Jet’s brand," he told Retail Dive earlier this year. "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."

That won't be answered by a new fulfillment center, but it does show that one of the urban markets that Walmart believes is worthy of Jet investment is the New York Tri-State area. The new center will create hundreds of new jobs there and will feature local brands through a NY Favorites Shop, offering an assortment from Big Gay Ice Cream, Roberta’s, The Meatball Shop and others, the company said.