29 June 2016
We have already posted an article about Amazon that is considered to be online retailer number one in the USA. We gave you practical tips on how to change the interface of your web store and what functionality is needed to be excluded and what, on the contrary, is extremely important to implement. In today’s article we will tell you the inspiring success history of Jet.com – the main rival of Amazon.
Marc Lore is an expert in ecommerce who has started his career as a CEO and founder of Quidsi which Amazon bought in 2010. When he started working on his new project called Jet.com he decided to rely on the people he had already worked with and who had already contributed his venture’s success. So former project director Mike Hanrahan and Nathan Faust, the VP of special operations at Quidsi were back in game.
Marc claims that Jet’s mission is instilling a new vision at ecommerce among shoppers. The key feature of Jet.com is the ability of customers to buy goods at 10-15$ lower due to year membership. First users are given 3-month trial to see how this actually works and if the services provided are worth the money they pay for being a member of Jet.com.
Prices start at about 8% discount and, in addition, customers are offered to save extra money combining multiple orders into a single shipment, free delivery on orders over 35$ or using debit cards instead of credit cards. The cost of annual membership is 49.99$ only what seems to be a drop in the sea comparing with benefits you get instead. Marc promises that annual membership will save an average customer 150$ per year. Otherwise, Jet will refund the difference between the membership fee and how much a person has saved.
Jet.com offers a wide range of goods: from clips to laptops. But some of the things that you may easily buy on Costco, for instance, are not available on Jet.com. This fact might be compensated with prices on rest of the goods that you can find in the store.
When Marc ran Diapers.com, the goods were packed in colorful boxes and often included a personal note. After Amazon took over, it was decided to follow the only one direction and deliver the purchases in typical Amazon boxes. Marc was deeply disappointed with such a decision though he was sure that it was pretty logical and more rational from profitable dimension. However, according to Lore: “You can’t put a number on what it means to create a personal connection to the consumer”.
The predictions on future seem very enthusiastic since it is expected that by 2020 Jet.com will have 15 million paying members with annual financial injections of $750 million, with 20 billion worth of sales per year. Still since the business model is based on the expectations if 15 million users join the service or not, Jet counts that operating margins will be negative for at least five years.
In the interview to CNN Money, Marc Lore was asked what his role in the whole working process is. Here is what he answered: “Recently I brought my daughter to the office and she said that all that I do the entire day is doing nothing – just talking to people.” Isn’t it important to inspire and motivate your employees to do something bigger than just selling goods?
Marc Lore, CEO and Founder of Jet.com