3 Setbacks Jet Must Overcome to Rival the Amazon Marketplace
Jet vs. Amazon
Jet is the new kid on the eCommerce block. The retailer officially launched on July 21st this year and raked in $1 million in sales on opening day. Not too bad for a much-hyped newcomer, but they have to earn their stripes before they can pose a true threat to Amazon. Here’s why:
Jet has limited inventory.
Jet had initially been listing many products that they didn’t have in their own warehouses. Instead, they used affiliate links (a legal gray area) to buy them from other retailers. This provides shoppers with Jet credits for buying the item through Jet instead of the retailer that had it in stock. The legal issues stem from the fact that they used those links without permission.
A number of retailers recently asked Jet to remove those links and unofficial affiliations with them. On the other hand, Amazon’s been working on their extensive inventory for over 20 years, so they have quite the advantage to the tune of 200 million stocked products.
It’s about more than price.
Jet is just competing on price at this point. They plainly state Amazon prices on product pages to show how they compare, but it’s just another sign of their focus: it’s all about price all the time.
Amazon has a lot to offer beyond pricing, like great customer service, streaming music and movies, their own original award-winning shows, and more. Sure, the annual fee is twice as much as Jet’s, but subscribers are also getting a lot for their money.
In recent years, Amazon has solidified their customer base and raised prices a bit on less common items. However, the price perception they’ve been working on keeps their image as a low-price leader in tact. Their image, mixed with the additional value that Prime provides, keeps shoppers coming back.
Jet has unconventional ways to save.
Shoppers have so many ways to save on Jet, from their basket contents to the payment type they use. While it may be an exciting way to see how low the price can get, some shoppers may not want to cater to the requirements for saving.
Jet’s CEO, Marc Lore, even recently admitted that Jet’s dynamic pricing is a bit hard to follow from a customer standpoint.
Unlike Jet, Amazon keeps it simple. They provide two day shipping on the items shoppers want and accept a number of payment methods. Jet’s price dropping model might end up being perceived as a gimmick.
It seems that the jury’s out on whether Jet will be able to give Amazon a run for their money. Amazon will be the winner for the foreseeable future because they are well-established and have massive resources.
They’ve got a nearly unbeatable value proposition and it’ll be interesting to see what Jet does to try to steal market share. Even if they end up in a price war, shoppers are interested in something more than just a low price and it will take time for Jet to develop that part of their business.
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