Why is Jet Unique?Hayley Smith
Jet.com was using a technology to dynamically adjust prices as a customers shopped. The Jet system is designed to lower prices as the customer shops because the technology helps them calculate the cost to the company of the “free” shipping they are giving away.
When customers clump orders together into fewer transactions it does more than drive up the “average check” figures. Large orders can be shipped more efficiently and the marginal cost of adding new items to the shipment may be dramatically smaller than the cost of selling that item in a separate transaction. This creates a strong incentive for customers to place bulk orders because Jet becomes extremely price competitive on large orders.
For example if a transaction in which they are sending a customer 3 large containers of a product. When Jet gets this order, they would much rather ship 3 containers in one transaction rather than 3 separate transactions. A customer on Amazon has no reason to lump the orders together because shipping is “free.” Jet latched onto the idea that customers demand “free” shipping, but estimates the shipping cost and offers discounts if the customer will buy all 3 containers in one transition. Jet sees the money on the transaction and split the savings with the customer.
Jet gained a great deal when Wal-Mart acquired them. The value unlocked by commingling the companies. Jet is still building their brand recognition, the intelligent design of their site should bringing more customers and help Wal-Mart create the line presence they are seeking.