At first glance, it’s not a terrible decision to style your new eCommerce venture as the first true “Amazon killer.” At the very least, the epithet gave Jet.com a few weeks’ worth of positive coverage when it launched back in July 2015 with plenty of fanfare (and a hastily dropped annual membership fee, too).
It’s been almost a year to the day since Jet launched, though, so what has the retail industry’s latest Amazon killer actually killed?
It might not satisfy the legal definition of a murder, but Jet has done OK for itself since launch. Chief Revenue Officer Scott Hilton told Internet Retailer that the company surpassed the $1 billion mark in gross merchandise value back in May, putting Jet “ahead of plan.” And with upwards of 3.5 million shoppers registered to the site, it doesn’t look like Jet will be crash landing anytime soon.
But maintaining level flight isn’t enough to take down Amazon — a company literally shooting rockets into space. Jet’s solid start means it can keep the uphill battle going for as long as it wants. The real question, though, is: One year into Jet’s anti-Amazon mission, does the eCommerce giant even know that it’s supposed rival is still there?
Few things, if any, escape Jeff Bezos’ notice, but Amazon’s numbers over recent months might as well serve as the coldest of shoulders to Jet. Amazon has posted a profit in each of its last four quarters, with Q1 2016 boasting a 28 percent increase to sales. That was before the second coming of Prime Day, too, when global sales spiked 60 percent over the first iteration’s 34.4 million items shipped. Single-day sales records were set for the Fire TV Stick, the Fire TV, Fire tablets, Kindle readers and its line of Alexa products.
It was, in the words of Vice President of Amazon Prime Greg Greeley, “the biggest day in the history of Amazon.”
So, no, Jet.com does not appear to have killed Amazon. And like the head cheerleader ahead of prom season, Amazon doesn’t seem to have much time to deal with band club members, like Jet.
Jet CEO Mark Lore has said before that Jet is “going after a different type of customer with a different need” than who Amazon targets, but the latter’s ubiquity in the online retail world means there’s very few demographic or pots capable of sustaining a business that Amazon doesn’t have at least a finger in already.
And if Jet actually does manage to somehow pose an existential threat to Amazon, that diversity could be what insulates it from any rocking competitors can do to its boat.
“If you look at Amazon, they have built a considerable amount of alternate businesses,” Boomerang Commerce CEO Guru Hariharan told Internet Retailer. “If you look at Walmart or Target, the bricks-and-mortar retail stores are still generating a huge amount of volume. They generate huge profits that end up helping them go long on their eCommerce investments. If you look at Jet, they have to beat low prices, but what is funding that? Do they have a stores network? No. The answer is they have a balance sheet. They’ve raised a whole bunch of money from venture capitalists to invest back into retail.”
If those chickens ever come home to roost, it might not be for a long while considering Jet’s solid foundation laid in the first year. However, at the pace that Amazon keeps pushing other online retailers as the pace car for an entire industry, Jet will have no choice but to follow the leader if it has any hope of one day setting the rules itself.
