> What exactly did he prove with Jet, other than he can spend more money to acquire customers than they will pay?
So true.
- Did they prove the membership model would work for them? No.
- Did they prove their loyalty program / gamified shopping (discounts, opting out of returns, etc) would work. No.
- Did they prove they could use technology to minimize shipping costs? No. they acquired customers by essentially giving away money.
They were basically fulfilling from Walmart and others at a loss. I can't think of another company post dot-com bust that deserved to crash and burn more than Jet. And yet they got a nice exit. The pixie dust must be amazing. Or it's just blinding FOMO on Walmart's part.
Anyway - the part that's ignored in their gamified shopping is that saving money requires work from the consumer:
- Use a debit card to save credit card fees - little to no consumer credit protections, no rewards points, can't delay payment. People that want to use this option aren't going to be the penny pinchers.
- Watch for the tag icon so you can bundle items that can ship together and save money. Requires work to save compared to competitors. Not everyone is a stay at home coupon clipper.
- Forego the ability to return your item and save money. If they know it's not likely to be returned - they should just lower the price on their end so the consumer doesn't have to think. And if there's a chance they might return it - now the consumer has to gamble? Sore taste the first time you gamble and lose.
- Free shipping, but only over $35. Another thing to think about.
I find it hard to believe that even with Walmart's audience, the gamification will pay that $3B off. Jet's trying to compete with Amazon on price, but they added more work for the user to save. And because of inventory/reviews/value, Amazon is the first stop for consumers. I don't see how Jet's offering is compelling at all.
So true.
- Did they prove the membership model would work for them? No.
- Did they prove their loyalty program / gamified shopping (discounts, opting out of returns, etc) would work. No.
- Did they prove they could use technology to minimize shipping costs? No. they acquired customers by essentially giving away money.
They were basically fulfilling from Walmart and others at a loss. I can't think of another company post dot-com bust that deserved to crash and burn more than Jet. And yet they got a nice exit. The pixie dust must be amazing. Or it's just blinding FOMO on Walmart's part.
Anyway - the part that's ignored in their gamified shopping is that saving money requires work from the consumer:
- Use a debit card to save credit card fees - little to no consumer credit protections, no rewards points, can't delay payment. People that want to use this option aren't going to be the penny pinchers.
- Watch for the tag icon so you can bundle items that can ship together and save money. Requires work to save compared to competitors. Not everyone is a stay at home coupon clipper.
- Forego the ability to return your item and save money. If they know it's not likely to be returned - they should just lower the price on their end so the consumer doesn't have to think. And if there's a chance they might return it - now the consumer has to gamble? Sore taste the first time you gamble and lose.
- Free shipping, but only over $35. Another thing to think about.
I find it hard to believe that even with Walmart's audience, the gamification will pay that $3B off. Jet's trying to compete with Amazon on price, but they added more work for the user to save. And because of inventory/reviews/value, Amazon is the first stop for consumers. I don't see how Jet's offering is compelling at all.