This article was published in the July 2016 issue of STORES Magazine.
The first day of operation for Jet.com was July 21, 2015. I placed my first order that day, and since then I’ve “awarded” Jet.com real estate on my smartphone and placed 18 additional orders.
No doubt, I’m a fan of this next-generation marketplace.
What sets Jet.com apart from others? To hear CEO Marc Lore describe it, the site is built on a real-time pricing algorithm that determines which sellers are the most efficient in value and shipping. As shoppers add items to their cart, prices are adjusted on the back end — in real time.
Every time an item is added to the cart, the savings rise. Take advantage of a new deal — the savings inch upward. Waive returns on an item — the savings bump up again. Buy in multiples, add specific items and … well, you get the idea. At checkout the savings total is tallied — and shoppers spending more than $35 are rewarded with free shipping.
That doesn’t mean Jet.com is always cheaper than its chief competitor. I’ve compared and contrasted baskets in the past, and sometimes I split my shopping list to get the best deal. I enjoy watching the savings grow as I shop on Jet.com; it feels a bit like a game. In my experience delivery times are on par with those of Amazon.com — even with Prime benefits.
Speaking recently at the Shoptalk event in Las Vegas, Lore called out pricing and transparency as building blocks to the company’s success. “We’ve pulled logistics costs out of the system,” he said.
Lore is no stranger to the online arena, to sophisticated back-end and logistics networks or to building relationships with consumers. He co-founded Quidsi — the parent company for both Diapers.com (started in 2005) and Soap.com (which launched in 2010). STORES featured an interview with Lore in August 2010 where he commented, “We’ve built an iron-clad infrastructure … service and selection are our value proposition.”
Since launching a year ago, Jet.com has amassed a selection of 11 million products from 1,800 retailers. Lore reports that the gross merchandise value of goods sold on the marketplace surpassed $1 billion in May and the marketplace is adding about 400,000 new customers a month. He expects Jet.com to reach overall profitability in 2020 and to secure $20 billion in general merchandise value.
Still, there is the question Lore confronts time and again: How do you compete with Amazon? Having first-hand knowledge of Amazon (Quidsi was acquired by Amazon in 2010 and Lore remained on board for a few years), he insists there’s room for many big players to coexist with Amazon.
“There’s going to be more than one player … there’s opportunity for a very large No. 2, or even No. 3. It’s not a winner take all,” he said, adding that he’d love to get a 10 percent share of the $1 trillion e-commerce market in the next 10 years.
Editor’s note: On August 8, Walmart agreed to purchase Jet.com for $3.3 billion, making it the most expensive U.S. e-commerce acquisition of all time. Walmart’s acquisition of Jet is intended to bulk up its online presence, particularly as more commerce moves online. Marc Lore, Jet’s 45-year-old founder and CEO, will lead Walmart’s U.S. e-commerce efforts and continue to run Jet.