My First Purchase on Jet.com (Beta)

Or How to Match UX to Value Proposition

Background

For those of you who don’t read Bloomberg (or Buzzfeed, or ReCode, or DealBook), Jet.com is a new retail startup, founded by Marc Lore, the co-founder of Quidsi (parent to Diapers.com) and backed by a lineup of VCs, including NEA, Accel, Bain Capital, and MentorTech. Jet aims to compete with Amazon and other online retailers by bringing a tried-and-true brick-and-mortar business model — the shopping club — to the online world. Like Costco and other traditional shopping clubs, Jet aims to make its money from membership fees and sell goods to its customers at or near cost or, as the company calls it “profit-free pricing”. In addition, Jet offers its members discounts at other online retailers, which can be redeemed for credits on Jet.com.

Jet first got my attention with its creative, pre-launch marketing campaign that offered 100,000 shares of the company to the person who referred the most signups to the site. The campaign ultimately yielded 350,000 members and cost the winner $18,000.

On Saturday, Jet got my attention again with this email welcoming me to the Beta:


My First Shopping Experience

I do A LOT of online shopping across a variety of retailers and the online retail space is fascinating to me — revenue models and UX, in particular. So today I figured I’d give Jet a try and see how those two things tie together on site. Here’s an overview of the 10 minutes or so I spent shopping.

Searching & Inventory

Inventory, at least for basic household items and non-perishable foods, appeared to be solid. I searched for paper towels, an iPhone car mount, and a well-known but often sold-out granola — all turned up available for purchase, most at prices lower than I typically see them in grocery stores.

Selecting Goods & Filling My Cart

The key selling point of Jet’s membership to me (and I assume others) is the savings pass-through. As I began to select items for my cart, Jet illustrated this savings to me in two ways.

First, it benchmarked its prices against a “Competitive Price” to illustrate its lower prices than others in the market (I’m still not entirely sure what the “competitive price” is based on):

Member vs. “Competitive”

Second, as I added more of the same item to my order, my cost per item decreased, illustrating that decreases in shipping costs due to efficient bundling would be translated (at least in part) to members:

One…
Two…
Three!

Checking Out

As I checked out, Jet again offered me more ways to save. First, it offered to discount items if I was willing to waive the right to return them. The cost of returns isn’t something consumers generally internalize when making a purchase, myself included. This savings option was the most surprising to me…and also the biggest no-brainer — at least for common household items.

Second, Jet offered to pass along savings on transaction costs if I used a Visa or Mastercard (more if I used debit):

Following Up

After I finished my transaction, I received two emails. First, a thank you and order confirmation, again reminding me of my savings:

A few hours later, a shipping confirmation:

All that’s left is to wait for the big purple box to arrive.

Summary & What’s Next?

Overall, I found Jet’s UX to be intuitive and pleasant, and I was really impressed by how well the company translated the savings it advertises (the primary member benefit) to the shopping experience. At each step of the way, I was reminded how Jet is different and how that translates to reduced prices for its members. (Admittedly, I haven’t done an in-depth study of Jet’s prices to know that they are lower than other online retailers, but my hunch is that the “competitive prices” are, in many cases, based on Amazon and other major online retailers). Knowing that membership businesses are just as much about retention as they are about new customer acquisition, the focus on differentiation and savings makes total sense from my perspective.

All that said, Amazon is a 500…no 5,000…no 5,000,0000 pound gorilla in online retail. Jet certainly has its work cut out for it, but the company has committed to spending $100 million on marketing during its first year and seems to be building an easy-to-use product with attractive prices. It will be very interesting to follow the company as it works through Beta and beyond.