Prime vs. Jet.com vs. Walmart: Who Will Win the Battle for Your Business?
For years now, Walmart and Amazon have been going head-to-head, chopping their prices and stealing customers back and forth with wild abandon. But now there's a new kid in town, one who just might give these two mega-retailers a run for their money.
Enter Jet, the brainchild of Marc Lore, co-founder and former CEO of Quidsi. Jet aims to beat Amazon and Walmart at the pricing game, and while the startup retailer still needs to catch up to its competitors' seemingly never-ending supply of goods, it may be winning the price war. When Jet launched last month, eCommerce intelligence site Profitero ran a price analysis on more than 16,000 exactly matched products on Jet, Amazon and Walmart. They found that Jet's prices were on average nine percent lower than Amazon's, and six percent lower than Walmart's.
Jet is a club retailer, much like Costco and Walmart's sister store, Sam's Club, which means you can't shop the site unless you fork over the $49.99 yearly membership fee. You can sign up for a free, three month trial membership, but shipping is only free on orders over $35.
But Jet's pricing strategy is deliberate. $49.99 is half the price of Amazon Prime's $99 annual cost, and one cent less than the $50 Walmart is charging for its new Shipping Pass pilot program, a loyalty program that gives members free three-day shipping on all online orders. The $35 minimum spending threshold for free shipping mirrors what both regular Walmart customers and non-Prime Amazon shoppers are subjected to. And because they don't plan to turn a profit on their merchandise (opting to make their money with subscriptions alone), their competitive prices might just convert Walmart and Amazon shoppers alike to switch loyalties.
So now we have three separate retailers trying very similar things in very different ways. Which one should you order from? Here's our breakdown of the pros and cons of each:
Pricing & Membership
Membership is $49.99/year, but you can sign up for a free, three-month trial membership. Items are priced on average below what they're going for at places like Amazon and Walmart, because Jet's business model doesn't require them to actually make any money off your purchases.
In some cases, the site offers customers things they don't stock themselves, and if you order them, Jet will have to buy them for more at another site and have them shipped directly to you. A Wall Street Journal reporter recently placed a $275.55 order with Jet, which ended up costing the company $518.46 to fulfill. This means Jet took a loss of $242.91 in order to deliver those items to the reporter.
Shipping & Returns
Two-to-five-day shipping is $5.99 for orders under $35, and free for orders over $35. Returns are also free (within 30 days), and if you want to save even more, Jet will take a select amount off each item that you waive the right to return.
By all accounts, Jet has outstanding customer service. Early customers received handwritten notes from members of the marketing team, and other reports say that when mistakes are made, they're remedied quickly and efficiently. Jet's relatively small size and need to make a good impression on first-time customers probably accounts for this attention to detail, so it will be interesting to see how their customer service progresses (or regresses) as the company grows in popularity and size.
This is where Jet falls flat. While their inventory of around 10 million items is nothing to sniff at, it pales in comparison to Amazon's estimated 300 million (Amazon does not advertise the exact number of products for sale on its site), and users have noted that while household items like cleaning supplies and toilet paper are in ample supply, their selection of things like apparel, sports equipment and fresh produce is severely lacking, as is their selection of generic brand products.
If you don't save more than the $49.99 annual fee, you can get the difference refunded. So if you only save $38 during your time as a Jet member, you can request that the $11.99 difference be refunded to the card you used to pay for your membership.
Other features unique to Jet are the many ways customers can get discounts on the site. You'll get money off for bigger carts, if you use a payment method with lower fees (think debit vs. credit), and, as I mentioned before, if you waive your right to return certain items. You can also earn JetCash on your Jet purchases which can be used to buy things offsite!
Pricing & Membership
You don't have to be a member to shop on Amazon, but if you want Prime perks, membership is $99/year. Amazon does have great deals, but you should always do a price check on items that are being sold by outside vendors lest you waste your money.
Shipping & Returns
Shipping rates on individual items vary based on your location and the vendor, but if you're buying directly from Amazon, orders over $35 receive free, two-day shipping.
Amazon has an entire Online Returns Center where you can check to see if your items are eligible for returns, print return labels and check the status of a recent return. According to this page: "You may return most new, unopened items sold and fulfilled by Amazon.com within 30 days of delivery for a full refund."
As a frequent Amazon customer, I've found their customer service to be adequate, but not exceptional. When a Prime Pantry order showed up at my house in a soaking wet, disintegrating cardboard box (a box of wet Swiffer pads had leaked during transit) missing the toilet paper and dish soap I ordered, I contacted customer service via Amazon's online chat option.
The rep was nice enough, but all she did was apologize and resend the missing items. This was fine, but it would have been nice to get a refund on the Swiffer pads, or a small gift card for my troubles. Still, I can't really complain as I got what I ordered and this experience was a billion times better than any I've had with other giant companies, like Comcast, for example.
As I said before, Amazon is estimated to have about 300 million items in its inventory at any given time, and there are very few things that exist in the world that you can't find on the site. It's also easy to browse a certain kind of item if you don't know exactly what you're looking for--searches for "birthday presents for teen boys" and "things moms like" both come up with helpful and relevant suggestions.
Uhh, where to begin? $99/year for Prime membership might seem steep, but you're not just paying for free shipping. Prime membership also comes with shared shipping benefits for up to four household members, access to Prime Pantry, Prime Now (Amazon's one-hour delivery service) Prime Music streaming services, free eBook rentals for Kindle devices, a free (unlimited!) cloud drive and, of course, access to all the amazing movies and TV shows on Prime Video. I actually wrote an entire article last month outlining the reasons I love my Prime membership, so check that out for more details.
Pricing & Membership
Love them or hate them, you can't deny that Walmart has some seriously good prices on everything from groceries to furniture. Anyone can shop both in-store and online without being a member, but they're launching a pilot membership program this summer for $50/year that gives online shoppers free, unlimited three-day shipping.
Shipping & Returns
Walmart recently lowered its free shipping threshold from $50 to $35 to compete with Amazon, but orders under $35 ship for $4.97 (for standard four-to-six day shipping, although in my experience stuff usually arrives much sooner than that). You can also sign up for the $50/year pilot program for unlimited three-day shipping, or if you live near a Walmart location (and if you live in the U.S., chances are high that you do), you can get any online order shipped to the store for free.
According to Walmart.com, "most items can be returned within 90 days of receiving them," as long as they're still in their original packaging.
I don't have personal experience with their customer service, but after doing a bit of research it seems they're about as good as you'd expect at solving customer woes--that is, not very good at all. Granted, most of the complaints I found were about in-store issues, but I found a few one-star ratings on Consumer Affairs detailing problems with online purchases. So it doesn't look like you're likely to be on the receiving end of any hand-written thank you notes.
At seven million, Walmart's online inventory is actually a bit smaller than Jet's, but the selection is so diverse you'll never notice, and unlike Jet, they're well stocked with cheaper, generic brands.
Not many. Free shipping and low prices are all that $50/year is going to get you, although having the option for an in-store experience isn't a bad perk. In all honesty, the $35 free shipping cap is low enough that I'm not sure $50/year for free shipping is worth it. But only time will tell.
UPDATE 10/2015: In an unprecedented move, Jet has reversed its original business plan and removed the $49.99 yearly membership fee, which was to be the company's sole source of income. Instead, they will raise prices enough to make a profit, but not too much: they still plan to beat Amazon's prices by at least five percent. Whether or not Jet will survive this upheaval in business strategy remains to be seen--as of now, the company isn't expected to turn a profit until 2020.