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Brief Published: 7 Aug 2015

Jet.com: Loyalty Club Retailing

Jet.com launches loyalty-based shopping club

Bidding to outpace even the most monolithic e-tail groups such as Amazon, US e-commerce site Jet has launched with the promise of the "lowest prices on everything" – achieved through an annual fee membership model.

Essentially a price-saving and loyalty-based shopping club, the Jet model exchanges high profit margins on products for making money from its subscription fees instead. Shoppers pay $50 a year for a discount of 10% or more on purchases. Further discounts are achieved as Jet adjusts the reduction depending on what and how the shopper purchases. For example, 'smart cart' items cost less when bought together, while waiving the right to free returns or paying by debit card rather than credit card also results in savings.

To further validate the savings achieved on Jet, 90% of the 10 million launch items also display the real-time price on Amazon. However, the company is not looking to rival Amazon's popular Prime service, which includes free unlimited shipping on certain products and media streaming for an annual fee.

Jet has also shrewdly partnered with third-party international brands such as sportswear label Nike, Spanish fast-fashion retailer Zara and tech giant Apple for additional 'JetCash' discounts of up to 30%. Currently a slightly convoluted process, users buy on the brands' e-commerce sites, but then pass on the email payment confirmation to Jet for verification of the discount.

Jet is part of an increasing number of businesses using new consumer loyalty systems to reinvigorate their consumer bases and deflect shopper promiscuity. For more on this topic, see Redefining Consumer Loyalty of Digital Natives, New Loyalty: Starbucks x The NY Times and Reactive Retail: Dynamic Data Builds Brand Traction.