Imagine a cross between Amazon and Costco — a new online shopping membership club, all within the comfort of your own home.
This concept is about to become a reality with the anticipated spring 2015 launch of Jet.com, an e-commerce site that’s already generating lots of buzz — and $80 million in investor capital.
An e-commerce site with a simple mission
Jet.com is the brainchild of Marc Lore, the co-founder of Diapers.com and former CEO of Diapers.com parent company Quidsi, which Amazon bought for more than $500 million in 2011.
The purpose of Lore’s new members-only shopping club is simple: It’s meant to save shoppers time and money.
“At Jet, we’re building a brand-new e-commerce experience that is grounded in customer empowerment and transparency,” Lore wrote in an email to NerdWallet. “We’re pulling costs out of the system and passing savings back to customers with prices lower than anywhere else online. As a Jet member, you won’t need to look for bargains or clip coupons. All you have to do is sign up and shop.”
“It’s a price club like Costco is,” said Sumaiya Balbale, Jet’s vice president of marketing.
“But rather than giving you discounts on bulk items, you basically get that discount across millions of items that you might buy. So, across basically everything that Amazon sells. In a nutshell, it’s a price club with the lowest prices on millions of items.”
The online membership site will carry an assortment of books, electronics, household goods and basically any other product you could imagine. Members will pay an annual fee of $49.99. And that fee comes with a guarantee.
“We guarantee that you’re going to save that cost of membership, or we refund the difference,” Balbale said.
She estimates that members will see savings of approximately 10% to 20% relative to the best online pricing.
A powerful shopping platform
Balbale says that Jet’s approach to shopping is uniquely different than that of its undeniable rival, Amazon.
Customers who use Amazon are able to select a vendor from which to purchase a particular product. With Jet, however, these logistics are handled for you.
Say you add a computer to your virtual shopping cart. Jet will try to locate the best possible deal from the closest merchant (you input your location so the site knows where you’re buying from). Add a computer mouse to the mix, and the site will recalibrate to find this particular combination of products at the best possible price.
As you continue browsing and picking items to buy, this deal-matching process begins anew. Thus, as you shop, you can watch your prices drop in real time.
“Our shopping engine is a pretty powerful shopping engine,’’ Balbale says. “The algorithms that help power the pricing are pretty complex, even though the shopping experience is pretty simple.”
Scott Stanzel, director of consumer communications for Amazon, declined comment for this article.
A look inside the engine
Other features Jet will offer once it gets off the ground include:
- Millions of products across an expansive variety of departments, from electronics to household goods
- Free shipping on orders over $35
- Free returns (and the possibility of saving more by choosing to waive returns on products)
Aiming to revolutionize online shopping
Those betting on Jet.com are aiming to change the way consumers approach shopping and deal-finding in general.
For starters, no more coupons. Instead, the savings are in the prices themselves.
For consumers who enjoy the satisfaction of applying a coupon code at checkout or shopping during a promotional event, this may be a bit of an adjustment. Bargain hunters will have to change their mindset to accept the possibility of grabbing a great deal without doing any extra work.
“It takes the need to hunt for things out of the equation because we’re always optimizing to get you the best value we possibly can,” Balbale said. “As it relates to online shopping, we hope that over time the need to price compare goes away because you know that Jet is getting you the best price it possibly can.”
New Jet Insider program
If you’re anxious to test-drive the site for yourself, you won’t even have to wait until it officially takes off to get your taste of the Jet experience. Thanks to a Jet Insider program, interested shoppers have been signing up since Nov. 25 for an exclusive sneak peek at the shopping club.
As of late January, more than 250,000 Jet Insiders have registered.
Here’s how it works: register your email address for Jet Insider and check your ranking (which is based on the number registrant you are). Move your way up the rankings by referring your friends to join Jet Insider.
If you simply sign up by Feb. 6, you’ll earn a free six-month membership when the site debuts this spring. But climb your way to a higher ranking and you’ll receive more than that.
Insiders in the Top 100,000 by Feb. 6 will earn early access to the site; those in the Top 10,000 will earn a free one-year membership; those in the Top 1,000 will earn a free five-year membership; those in the Top 100 will earn a free lifetime membership; those in the Top 10 will earn 10,000 shares of Jet stock; and the No. 1 Insider will earn 100,000 shares of Jet stock.
With a few months to go before takeoff, Balbale senses anticipation is already growing. There’s no single key demographic that Jet is hoping will hop aboard this new e-commerce trend. The company is thinking big.
“Everybody loves saving money,” Balbale said.
Image via iStock.