With the holiday season naturally comes online shopping, and this year, there’s a new player: Jet.com, the fabled Amazon competitor. Given a lot of press during its July launch, and listed as one of Inc’s most-talked about new startups of 2015, now is the time that Jet could really shine.
Jet is shiny, sleek and easy to use. It’s covered in reminders that you’re saving money, and offers an additional discount of 15 percent off of a customer’s first order.
When it comes to consumer perspective, however, Jet doesn’t appear to be entirely living up to the $500 million hype, despite some promising numbers around repeat business. It’s not that consumers aren’t using it or talking about it – they are. It’s just that a lot of them don’t seem particularly happy.
Better Business Bureau has given the company a C, based on 64 complaints and 9 online customer reviews (all negative, by the way). Retail review site ResellerRatings gives Jet a 3.24 out of 10, based on customer feedback, and Trust Pilot gives it a 4.3 out of 10.
Sixty percent of online shoppers consult online reviews before making a purchase decision, and Jet is losing that battle in a big way. Amazon is a household name, and no longer has to depend heavily on reviews. But Jet, as a new company, needs every good review it can get.
In October, Jet got rid of its annual $50 membership fee in an attempt to draw new customers. Some saw it as the first sign of faltering for the marketplace, but according to founder Marc Lore, Jet had seen such success in the first three months – double the anticipated orders – that the membership fee became entirely unnecessary.
However, the membership fee was supposed to be Jet’s main source of revenue – in fact, it was the mechanism that was to allow Jet to provide its distinctly low prices. Lore said to compensate, the price cuts will now need be more modest – only 4 or 5 percent less than competitors. This will shine an even brighter light on overall user experience.
An additional problem – one that most people might not immediately notice – is that significantly lower prices might scare off some suppliers. If Jet tries to negotiate even lower prices, suppliers, already squeezed by large retailers, may stick to their existing guns, greatly limiting the availability of merchandise on Jet.com. In fact, Jet may already be having that problem: the Wall Street Journal pointed out that while Jet was often cheaper than its competitors, it was not nearly as well-stocked. That could just be growing pains, but it could be more.
It would also be surprising if Jeff Bezos just rolled over and allowed Jet to undercut Amazon prices to any significant degree. If Bezos ever felt like Jet was a serious threat, he’d probably make noise. Bezos has run Amazon on razor-thin profit margins for years, and lowering prices to stagnate a competitor would not be outside his aggressive wheelhouse.
The fact of the matter though, is that Jet isn’t a real competitor. Yet. Especially during the holidays, customers need a company they can trust, and Jet isn’t there. Bad reviews of Jet are not hard to find, and many of them focus on shipping, a crucial element to online shopping anytime, but especially in December.
Jet has given up on delivering in time for Christmas, as advertised by a banner at the top of their website, while at Amazon, up until the end of last week, Prime customers still had several days to order in time for Christmas.
Jet doesn’t seem to have proper customer service, either. They didn’t in July and based on the reviews, they still don’t. Low prices are no longer enough to make customers flock to a business. Taxi companies may think they’re losing to Uber because of poor regulation, cut-throat pricing and expensive technology, but they’re wrong; as people are pointing out, they’re losing because of customer service and all the nuance that it entails. To properly compete, Jet may need to adjust its flight plan. In their industry, considering the nature of its competition and its consumers, there isn’t always a lot of runway to work with.
