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The XY Factor Of Jet.com

The retail media has been abuzz with chatter in recent months with the launch and steady rise of discount aggregator membership site, Jet.com. Well-positioned — and well-promoted — the members-only site capitalizes on price-sensitivity instead of loyalty (which is hard won in today’s online retail space), has a low threshold for entry, and offers a competitive shipping and return policy on a wide variety of items. It is seemingly in a position to take on major players like Amazon and Walmart for market dominance in online shopping.

However, buzz can be deceiving — and earlier this month the service dropped its membership fee, a sign that perhaps consumers weren’t biting on the discount marketplace. A few months after initial launch, we were curious to see just how much traction the site has garnered, and what these early adopters of the service might reveal about the future of the hotly contested niche membership-based retail service market. In September, Prosper Insights released a survey that shows just how much attention the launch of the site and subsequent ad campaigns had garnered the brand. What they found was surprising. Here are some of the interesting data points … as well as ways for retailers to capitalize on the insights.

While 18.6 percent of adults polled had heard of and recognized Jet.com (that translates to roughly 45 million U.S consumers) it was the type of shopper who said they had made a purchase on the site that was most interesting. Among the consumers who had actually visited or made a purchase on Jet.com, the majority of them (65.2 percent) were male, with 58.7 percent of those being under the age of 35. This is a demographic profile akin to what one might expect when polling about a recent technology launch and may hold some interesting possibilities for the future of membership-based retail services.

Perhaps it is Jet’s use of spokespeople like comedian and castmember of “Silicon Valley,” Kumail Nanjiani, in a plaid button-down and cardigan sweater, explaining how Jet.com works. Or maybe it’s the use of language like “Welcome to the ultimate shopping hack” that is attracting a young and tech-savvy male user. According to The Washington Post, the brand has invested $100 million toward marketing to millennials, a strategy that seems to be paying off, according to early results.

Another explanation for this heavy male adoption is the notion that mobile devices are fundamentally changing the way we shop and, in some ways, bridging the gender gap. In a study released by Retale in June 2015 that surveyed more than 3.5 million shippers, 52 percent of male respondents said they used their phones to compare prices and 49 percent said the use them to search for coupons. While the study goes on to say that men are still less likely than women, specifically millennial moms, to actually use the coupon, it suggests that mobile devices have altered the very process of “bargain hunting,” moving it from an elongated in-store task to more of a digital game that may be equally appealing to men and women.

The “mission-based” style of shopping that male consumers have demonstrated for years is perfectly complemented by mobile services like Jet.com. As a Nielsen report from 2013 pointed out, men tend to shop functionally, planning purchases to replenish needs. While women like to browse, discover things they weren’t even looking for and have an “experience,” men comparatively know what they want and approach shopping like a mission to find that item and be done as quickly as possible.

Men’s roles as they relate to household shopping have shifted as well. As more women take on more career responsibilities outside the home, parenting and household tasks are being split more equally between millennial mothers and fathers. Making regular purchases may now be a task that dad takes on and which he approaches differently than mom. Jet.com is perfectly positioned in this regard, allowing shoppers to easily repeat purchases month over month, compare prices between similar products and apply points earned from past purchases to future orders.

Another interesting point to note about early Jet.com adopters: they are no strangers to retail membership programs. According to Prosper Insights, this group was 70 percent more likely to already be using Amazon Prime, 60 percent more likely to have a Costco membership, and 35 percent more likely to be an existing Sam’s Club member. This warrants the question: how many memberships will be too many for American consumers? Will there be a tipping point when shoppers don’t want to sign up for one more digital account? And will this force brands to start to merge and join forces, offering complementary instead of competing services?

For now it seems that with the substantial early adoption of Jet.com, shoppers have said yes to one more online digital retail account — as long as it comes with significant savings, ease of access and the promise of a speedy shopping experience.

If providers of similar services are looking to differentiate themselves — as Jet’s experience has proven thus far — it might not hurt to position themselves toward males as being the potential “next big thing.”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 edition of the FI Innovation Readiness Playbook examines how the innovation playing field is leveling as small FIs implement bolder strategies and larger banks adopt more measured approaches.

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