Merchant Innovation’s Takeoff Plagued By Unhappy Retailers

Just out of the gate and Jet is having some trouble with affiliates. Or better to say with affiliates who did not know they were affiliates.

A legion of the nation’s largest retailers — Walmart, Gap, Macy’s, Home Depot, Williams-Sonoma and even Amazon (Jet’s putative main rival) — have all asked the emerging eCommerce player to remove links to their sites that Jet was not given explicit permission to display.

According to Wall Street Journal reports, 100 brands from at least 70 different firms have seen the products removed from the site since July 1, most since the firm’s launch on July 21.

“If someone is using our brand without our permission, there are a multitude of concerns, and we’re not going to allow it,” said a Home Depot spokesman, who added that Jet was cooperative in removing his company’s logo after being asked to do so.

The main issue seems to be cash back being offered by Jet via its affiliate program called “Jet Anywhere.”

Since Jet draws its revenue from its $50 annual membership fee and not from selling goods, it turns 80 percent of the commissions it receives into a form of onsite currency called Jet Cash. Jet Cash can be spent on items, and it can add up pretty fast. For example, at present, Nike products are netting 30 percent cash back, meaning a purchase of one expensive pair of shoes essentially provides enough cash back to be a Jet member for a year.

From Jet’s point of view, it is a good way to encourage other retailers to sell through Jet, as it demonstrates its use as a traffic and conversion generator. While it is a small part of Jet’s bottom line, it is not an insignificant one. It accounts for about 15 percent of the firm’s business.

According to Liza Landsman, the firm’s chief customer officer, the reasons for reactions have been mixed. Some wanted a formal affiliate deal but remain open to partnering with Jet going forward. Others view Jet as a competitor and want nothing to do with the new eCommece player on the field. Still others — like Lord & Taylor and Saks parent company Hudson Bay — were surprised to find out they were part of the Jet Anywhere program but were unperturbed by the news.

Many of the firms that have complained and asked to be removed this week had no idea they were on the site until they were contacted by a WSJ reporter.

“I felt a little blindsided by it,” said Bluefly Inc. CMO Carly Rosenberg. “I just think they went about it the wrong way.”


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