Jet.com Takes On Amazon
By Christine Kern, contributing writer
New online retailer boasts plans to lure customers away from the online leader with lowest prices.
A new online retailer, Jet.com, has entered the competition, boasting plans to lure customers away from Amazon and other competitors with the lowest prices on the internet. The startup, founded by Marc Lore, had managed to raise $250 million dollars, even before the public could make any purchases on the site, and he seems to be thriving on challenging Amazon’s supremacy.
The launch comes just as Amazon is set to release its latest earnings figures.
Jet's business model is an amalgam of the Amazon Prime and Costco models, and for a $49.99 membership fee customers receive free shipping and low prices. Mike Maughan, Qualtrics, an online data company, told Marketplace that ultimately it will boil down to customer experience. Jet has to make you feel like you’re getting more than just a good deal.
“I think it's incumbent upon Jet.com to demonstrate and provide an incredible customer experience," Maughan explained. "Price isn’t everything. If it’s all that someone’s got, it won’t last and I don’t think it’s sustainable."
The basic question, Maughan asks is: "Is there an appetite for a competitor to Amazon? Amazon is very popular and a lot of people use it but it is not used ubiquitously. Still only about 10 percent of retail shopping happens online."
Jet co-founder and CEO Marc Lore explained the premise behind Jet.com, stating, “There are 90 million households in America that don’t have Prime….This is going to be the fastest and cheapest shipping option for those households.”
The service promises delivery of household essential products in one to two days, with other products arriving in two to five days.
Lore explained to Tech Crunch, “With Amazon Prime, Google Shopping Express, eBay Now, [Walmart’s] ShippingPass and ShopRunner – everyone was chasing the same customer – the customer willing to pay a premium for service,” Lore explains. “I saw a big opportunity to go after the much larger segment of the market, which was people who cared about saving money. So I came up with this idea where consumers could save 10 to 15 percent below the lowest prices online.”
To date, 2,200 retailers have signed up to sell through Jet.com including NewEgg, Barnes & Noble, Lenovo, Asus, Dell, Harper Collins, Bluefly and others, but only 500 have completed integrations as of the site’s initial launch.
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