Data analytics company Profitero looked at prices on Jet.com on its launch day, comparing them to Amazon and Wal-Mart Stores Inc., and found that prices on average, on “exactly-matched products,” were 9% lower than Amazon and 6% lower than Wal-Mart.
Jet’s prices were closer to its more established competitors on higher-priced items like electronics, and in some cases were even higher.
For Amazon’s top 20 bestsellers, Jet’s prices were on average 8% lower than Amazon’s, although Jet's prices were closer to Amazon's for best sellers in the Household category when compared to non-bestsellers in the same category.
Jet launched a couple of weeks ago now, promising to have lower prices on the web. Profitero has found that, essentially, Jet has been true to its word — competing aggressively on price. But it's not all that cut and dried, experts tell Retail Dive.
"Although there is no clear winner on price, it is clear that Jet is pricing aggressively at launch, especially on key household essentials such as Baby, Beauty, Pet Supplies, and Household products,” says Profitero’s Keith Anderson. “Price competition is at the center of Jet’s strategy, and the price comparisons Jet includes on its own product pages are likely to intensify competition.”
That’s good news for consumers. And not just for those signing up for Jet—Amazon and Wal-Mart may very well adjust their prices on some items in response to the competition. That’s one problem for Jet.
But another problem for them is that Amazon, at least, is not necessarily competing all that much on price anymore. Feedvisor’s Shmuli Goldberg says that the e-retail giant has actually never been purely about price. And neither are consumers.
“We have the numbers — less than 12% of online shoppers are purely price sensitive,” Goldberg told Retail Dive. “Amazon and Prime have never been about being the cheapest.”
Goldberg says that Amazon has excelled at finding value for its customers, with added perks to its Prime membership like free photo cloud storage and video streaming. There are other variables beyond price that consumers respond to (with their wallets): return windows, faster shipping, ease of payments.
“We know that people are willing to pay more for additional services and values,” Goldberg says. “What Amazon do best is that online experience.”