Jenny Fleiss is swapping out ball gowns for bots.

On Wednesday, the co-founder and former head of logistics with Rent the Runway, the online fashion rental service and former Inc. Company of the Year contender, announced her latest venture: an e-commerce shopping business called Jetblack, which targets affluent mothers in urban areas. The A.I.-enabled service functions as a chatbot--aptly dubbed "J"--that recommends, orders, and delivers products at the touch of a button. Customers subscribe for $50 a month, and in return can get virtually as many products as they want, excepting foods that need to be refrigerated and alcohol. Simply text "J" that you need, say, diapers or jewelry, and customers can expect their preferred brand to be delivered to their doorstep in as little as a few hours.

"It was a gut decision," Fleiss tells Inc. of launching Jetblack. "This is an exciting moment in time where there are these giants in the world of retail--namely, Amazon and Walmart--that will have a huge impact on our world and our lives. To be innovating in this race is really exciting." 

Lessons from the rodeo

Fleiss left Rent the Runway just over a year ago to join Walmart's startup incubator, Store No. 8, and has been quietly shepherding Jetblack--its first portfolio company--for the past six months. Indeed the service, which is invitation-only at present, is said to have a "robust" waiting list, although Fleiss declined to comment on how many users she expects to attract over the next several months. The average customer, she notes, buys around 10 items per week, and the company will save their preference data to serve up their favorite brands accordingly. Jetblack, which is fully financed through the Store No. 8 incubator, does source Walmart and Jet.com products "where appropriate" for everyday items such as paper towels. Over time, however, the goal is to set up wholesale deals with a variety of retailers.

"We're operating at a really fast pace," adds Fleiss, who declined to comment on how much money she's been able to raise through Walmart, or the amount of sales the startup has generated to date, but says the company is at a "Series B" stage in its development.

Fleiss is adamant that her experience with Rent the Runway has informed her approach to Jetblack in more ways than one. In particular, she says she's learned how to keep a pulse on what customers want: "At Rent the Runway, we would make everyone answer customer service calls, and occasionally pack orders ourselves," she notes. "That's a big part of Jetblack, too." The startup's warehouse assembly room is in-office, for instance, where Fleiss checks in multiple times a day.

More generally, she says her background in logistics has helped her to oversee what has ended up being a mammoth undertaking. "This challenge of people ordering at super high frequency and a really long tail of products--from paper towels to Hermes bangles--requires a lot of merchandising expertise," she says. Jetblack currently houses very little inventory, and sends runners to pick up products from various stores around New York City, the only location where the service is currently available. "My experience at Rent the Runway really helped me hone those skills this time around," Fleiss added.

Truly stiff competition

To be sure, the chatbot-for-shopping idea is nothing new. Earlier this year, Amazon made its own conversational interface tool, Amazon Lex, generally available to third-party businesses. Lex is built on the technology underlying Amazon's digital assistant, Alexa. Meanwhile, Facebook, Microsoft, and Google all have some version of a digital assistant that could be harnessed to order products online. But Fleiss says that Jetblack--by virtue of being designed specifically for shopping, and as a text rather than voice-based service--has a competitive advantage.

"Amazon has taken a clear position, [in that] they've made shopping into a chore," says Fleiss. "The real opportunity for us is making shopping delightful again. Can you feel like you walk away with a better product, and having saved time?"

In the interim, at least, Fleiss is clear-eyed that Amazon has an edge. Although Walmart currently eclipses Amazon in terms of revenue--surpassing $500 billion for the first time in 2017 sales--the former is the clear market leader in e-commerce, accounting for as much as 44 percent of all online retail, according to data from One Click Retail. Still Walmart, which has traditionally targeted shoppers on tighter budgets, has been making a deeper foray into more high-end products, as with the 2017 acquisition of the men's retailer Bonobos. Jetblack certainly marks an extension of that strategy. 

Market share notwithstanding, Fleiss says she's up for the challenge. "It's fun being the underdog a little bit, especially in the e-commerce space. Amazon has really shown their power," she said. "Walmart is at a moment where they're getting serious about this fight."

Published on: May 31, 2018