Jet.com has launched to great fanfare, promising—and largely delivering—the lowest prices on the web.
But Amazon, its major rival in the space, is no longer competing on price, experts say.
And Jet may also lose on another important metric — assortment, says Forbes.
Jet’s essential price promise — that it provides the lowest on the web and that filling your cart lowers that further — may suffer from two essential flaws.
One, that consumers may not be so price sensitive as Jet may think. And two, that Jet may not have neither the assortment nor the necessary details about products that consumers require to hit the buy button.
Jet’s apparent model retailer — Costco — has the built-in advantage of being a brick-and-mortar retailer — people come to buy, can see and touch the merchandise, and collect other things along the way, things they can also touch and feel.
“Jet will no doubt be able to bring in bargain hunters, but with the Internet becoming less and less price sensitive, it's hard to predict how much of a draw just having the cheapest prices will be,” Shmuli Goldberg, director of marketing at price strategy firm Feedvisor.com, has told Retail Dive. “Amazon's answer to this will be to play to its strengths. Instead of lowering prices to compete with Jet, it will continue to add value to its subscription-based Prime program, as we saw with Amazon Prime Day, to encourage customers to pay that little bit more for a superb customer experience and overall excellent service.”
It could be that Jet isn’t playing on the right field, or that it doesn’t have the right equipment to play, or both. One thing that Jet does still have, at least for a while, is time to find out.