retail news in context, analysis with attitude

Money magazine offers an update on Jet's progress since being launched last summer as an online competitor to Amazon, saying that it has "been adding 350,000 customers per month and last week added fresh groceries to the long list of items it sells."

According to the story, "What’s attracting customers to Jet.com is the same thing that first drew shoppers to Amazon: low prices. Jet.com originally pursued a strategy of significantly undercutting the competition on a wide range of goods, with a particular focus on standard household purchases like paper towels, soap, toothpaste, and pasta." The company has been focusing on low prices and changing some of its original tactics; it "eliminated the $50 membership fee it initially planned on charging, and it offers all shoppers free shipping with purchases of $35 and up—both of which compare very favorably to Amazon, which charges $99 annually for Prime membership and the privilege of free two-day shipping on most purchases."

Money goes on to draw the battle lines: "Many studies and unscientific price comparisons indicate that (Jet CEO Marc) Lore is correct concerning the fact that Jet.com often beats Amazon on price, and that Amazon doesn’t quite dominate the low price battle as it once did. Instead, Amazon’s success is increasingly relying on the strategy of turning casual shoppers into Prime subscribers. Once they’re members, their spending at Amazon tends to increase significantly due to convenience, habit, and the appearance of saving money via competitive (if not the absolute cheapest) prices and free two-day shipping. Prime’s other perks, like free Prime Video streaming and unlimited photo storage, serve as incentives for paying subscribers to keep being paying subscribers, even after they realize that other sites may be cheaper than Amazon."

While Jet "may never become the 'Amazon killer' it was hyped as ... by consistently undercutting the Amazons, Costcos, and Walmarts of the world with 5% cheaper prices, it can win over many more customers and become a very powerful player in retail."
KC's View:
I have to admit that I've done some comparison shopping on Jet, and I think it is fair to say that it is competitive with Amazon on price, sometimes a little lower and sometimes a bit higher, but usually right in the neighborhood. I guess that one of the things that hurts Jet is the fact that compared to Amazon, it just seems far less robust ... in fact, it is far less robust. But it seems like a legitimate competitor, though it continues to support its low prices with investment dollars, and it is racing to build its volume to the point where those numbers alone will justify getting better prices from suppliers.