Walmart announces it will fully integrate Jet’s teams, but Jet will remain a standalone brand

Three years after acquiring Jet for $3 billion, Walmart announced today that it is now more fully integrating Jet’s teams into Walmart. Jet will continue to operate as a standalone brand, mainly in large cities.

Jet president Simon Belsham will support the transition through early August. After that, Jet will be managed by Kiernan Shanahan, Walmart senior vice president of food, consumables and health and wellness and the lead of Walmart Ecommerce’s Everyday Living category. Jeff Saunders, Jet’s vice president of operations and tech lead, will lead the integration of Jet into the Everyday Living team.

In a blog post announcing the transition, Walmart Ecommerce president and CEO Marc Lore explained that the company decided to fold the rest of Jet’s teams into Walmart because “Across most of the country, we saw we could get a much higher return on our marketing investments with Walmart.com, so we’ve dialed up our marketing spend there. However, in specific large cities where Walmart has few or no stores, Jet has become hyper focused on those urban customers.”

“While this has made Jet smaller from a sales perspective, it has helped us create a smart portfolio approach where our businesses complement each other,” he added.

After Walmart acquired Jet in 2016, it merged a few of its teams, including supply chain. Combining fulfillment centers and mirroring inventory helped Walmart build its delivery logistics , enabling two-day free shipping and free next-day delivery without a membership fee, making it more competitive with Amazon, which charges a fee for its Prime program.

Jet.com relaunched last year to focus on customers in big cities, like New York, with a product assortment tailored to their shopping preferences and three-hour grocery delivery to compete with Amazon Prime Now. Jet also introduced a concierge shopping service called JetBlack last year as a standalone e-commerce business aimed at busy parents living in cities who don’t have a lot of time to shop in brick and mortar stores or browse online. Last week, JetBlack announced that its customers spend an average of $1,500 per month on purchases, on top of the $50 monthly fee they pay for the service.

In his post, Lore wrote “Jet continues to be a very valuable brand to us, and it is playing a specific role in helping Walmart reach urban customers. The focus has largely been on NY so far, and we’re looking at other cities where we might bring together Jet’s expertise and the scale and operating model of Walmart. More to come on that.”