Jet.com Is Appealing to New Yorkers With Pizza and Ice Cream

Ecommerce company Jet.com is opening a fulfillment center in the Bronx borough of New York in the fall. The center will reportedly enable deliveries of groceries and other items within the Bronx, as well as to Manhattan, Brooklyn and Queens. (Customers in Staten Island will have to wait.) It’s the latest move in a busy year for grocery delivery overall, but consumer hearts and minds are far from won. Jet.com, however, hopes product distinctions like Big Gay Ice Cream and iPhones will set it apart from the myriad options New Yorkers already have, including Amazon Fresh, Instacart, FreshDirect and Peapod, as well as traditional grocers. Per a rep, orders will be placed on Jet.com, and same-day and next-day delivery options will be available. The Bronx fulfillment center will house Jet.com inventory—a rep said both perishables and packaged goods will be available, along with household supplies and electronics—and it will use last-mile delivery company Parcel to get these orders to New Yorkers’ homes. Jet.com parent Walmart acquired Parcel in October 2017. At the time, Nate Faust, svp of Walmart U.S. ecommerce supply chain, said Parcel could facilitate deliveries of orders—groceries included—for both Walmart and Jet. In a similar move, Target acquired grocery delivery service Shipt in December and started rolling out same-day delivery in Alabama and Florida in February as it hopes to eventually make the service available nationwide. And then there’s Kroger, which says it has 2,800 stores in 35 states (but no grocery stores in New York); it recently partnered with robotics company Nuro to pilot an autonomous grocery-delivery service in an undisclosed market in the fall. The Jet.com rep said it currently delivers to “customers along the Northeast from Boston to D.C.” and is “continuing to explore options and areas beyond there, including Staten Island.” She did not, however, have anything to share about delivery costs or minimum order thresholds, saying, “We’re still working out those details.” There’s a delicate balance between cost effectiveness for retailers and affordability for consumers in grocery delivery. Walmart, for example, launched its grocery delivery service with a $30 minimum and a $9.95 fee. And Amazon Fresh has a $50 minimum order for free delivery and otherwise carries a $9.99 delivery fee. It makes sense that platforms like Jet.com are targeting city-dwelling consumers as they roll out these services; these shoppers are perhaps more likely to fork over $10 so they don’t have to schlep home. Jet.com itself offers free shipping on orders over $35. It has long emphasized back-end logistics, rewarding customers who order items that can be packed and shipped with other items in their carts by lowering the price of items in that cart. “It costs us less to ship multiple items together, so when you add items with the [price drop] tag to your cart, you pay less,” Jet.com says on its site. For his part, Mike Griswold, vp of research at Gartner, said grocery delivery remains a challenge for food retailers. “I do believe urban markets will be the most receptive to delivery,” he added. “At the end of the day, I think we will land in an environment where in-store pick-up is the predominant service in less urban markets and delivery is more prevalent in urban markets.” Jet.com boasts its grocery delivery in New York will offer products from local institutions like Roberta’s, The Meatball Shop and Big Gay Ice Cream. Once upon a time, Amazon also offered products from New York restaurants like the Tuck Shop via Amazon Fresh, but these products are no longer available. It wasn’t clear why that selection of local favorites was removed—or if the integration of options from Whole Foods impacted the decision. An Amazon rep did not comment on the disappearance of Tuck Shop, instead pointing to Amazon Fresh's Local Market and the ability to shop from Whole Foods. The Jet.com rep also noted its grocery delivery option will be distinct from Walmart delivery. Meanwhile, Walmart has repeatedly said it wants to bring grocery delivery to 40 percent of the U.S. this year. As a means to this end, it has established a number of last-mile partnerships, including on-demand delivery service DoorDash in Atlanta; Postmates in Charlotte, N.C.; and Uber and Deliv in states like California, Texas and Florida. But Walmart has a lot of other grocery options, including two-day shipping and an online grocery pickup service, as well as in-building and in-fridge delivery with smart access providers Latch and August Home.