Pure-play e-commerce upstart Jet.com is piloting a grocery-delivery business in New York City, New Jersey, Connecticut, Pennsylvania, and Washington, D.C., ReCode reports.
Grocery deliveries will be free for orders over $35, compared to Amazon’s grocery deliveries, which require a $299 annual membership and a minimum order of $50 or more.
Jet’s grocery pilot delivers milk, fruit, and meat, and, rather than same-day, promises the orders within a day or two.
Jet executives so far have minimized the notion that Amazon is a major competitor, but this move, as ReCode’s Jason del Rey notes, takes aim at an area that Amazon has yet to dominate. The company is still trying to drum up a loyal following that mimics Amazon's legions of Prime members, and this ploy might help it in that area.
But, as ReCode also points out, food delivery is a tricky business given the perishable nature of some of its products and the thin profit margins it sees.
Jet's two day delivery could help the company attract people that don't want to fork over $99 for a Prime membership, much less nearly $300 for an Amazon Fresh grocery account, according to Profitero’s Keith Anderson. The retailer abandoned its $50 membership fee in a broad business overhaul last year.
“If you take Jet’s comments at face value, I don’t know if they have a strong ambition to convert a lot of shoppers from Amazon to Jet,” Anderson said. “They seem to be trying to convert new shoppers to be online shoppers, which I find to be a risky gamble. They’re interested in the household that values money more than time …it’s such a precise segment of shoppers that they hope exists.”