Amazon, Walmart rival Jet.com launches new e-commerce model

July 21 09:03 2015

Marc Lore’s ambition is as spectacular as his view of the sparkling Manhattan skyline. From new headquarters on the Frank Sinatra side of the Hudson River, the former Quidsi founder’s latest venture – Jet.com – plans to take on online shopping’s biggest players, from Amazon to Walmart.635725844869140056-jet

Jet’s consumer proposition is as simple as its algorithms are complex: Spend $50 a year for a membership and you get the Web’s lowest prices on 10 million-plus goods. Fueled by $225 million in funding (“Though it will take much more to get us on the e-commerce flywheel,” says Lore) and encouraged by months of beta testing with 150,000 customers (“We saw repeat rates of more than 50%,” he adds), Jet rolls out nationally Tuesday with a three-month free trial.

With the proper runway, Jet could take off. E-commerce sales totaled $300 billion last year and will surge to $414 billion by 2018, according to Forrester Research. Currently, e-commerce represents less than 10% of retail sales, and some analysts predict a jump to 30% by 2030. With average savings of 10-15% on most items, Jet’s niche is the cost-conscious, from millennials on a budget to boomers hunting coupon-less savings.

Here’s how Jet works. As you add items to your basket, a discount tally starts accruing. The more you add, the bigger the discount, aided by specific choices such as opting out of a product return (a cost that Lore says is built into most shipped goods) and non-credit card payments (debit cards and linked checking accounts cut your final bill). Lore’s real-time trading reference speaks to the system’s ability to adjust your discount based in part on where suppliers are. The closer the supplier, the lower the price. It gets Lore thinking about a bottle of ketchup.

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