The much talked-about ecommerce site, Jet, is launching its Costco-for-the-Web marketplace today to the general public.
For $50 annually, Jet delivers cut-rate deals on everything from toilet paper and groceries to dresses and televisions. The company is hoping it can lure in a vast customer base by undercutting the competition on price. But as Jet chief marketing officer Liza Landsman explained earlier this year at VentureBeat’s GrowthBeat Summit, Jet’s strategy isn’t just about penny-pinching. It’s also about creating a more personalized experience for shoppers.
When Jet first launched to a small number of beta testers through the Jet Insiders program, its customer relations team sent out handwritten notes to customers after they made their first purchase. Since then, Jet reps have been encouraged to handwrite at least one note to a person they’ve interacted with during the day.
Small touches
Landsman calls this “small touches,” and they’re integral to how Jet thinks it will be able to draw in the masses. In order for Jet’s business model to work, it needs to sell $20 billion worth of merchandise annually. Jet cofounder Marc Lore thinks the company will hit that mark in the next five years, according to a Wall Street Journal article. To put that in perspective, Amazon was generating a little more than $19 billion in sales annually in its first five years.
Much like Amazon, Jet is dead focused on bringing its customers value and developing a loyal following. The use of the word “loyal” is perhaps a bit understated for what Jet is trying to do — Jet wants a cult following. Take, for example, the Insiders program it launched ahead of its wider release. Jet offered early adopters a chance to win shares of company stock by signing up as many people as they could. The leading Jet Insider landed 100,000 shares; 10 others got 10,000 shares a piece. Though only a small number of Insiders won, the promotion could have a ripple effect, making Jet users who participated in the program feel like they’re part of something — a notion Jet actively encourages.
There is a wall at Jet’s corporate headquarters filled with the names of its earliest shoppers. “Jet Wallers,” as they’re called, are the company’s most devoted fans. As of June 15, there were 2,000 names on the wall.
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“Measuring those small touches … and their impact is hard,” Landsman said in Boston, comparing it more to a dark art than a science. “People don’t experience [them] the same way. That’s why we use qualitative research to tease out some of that humanity.”
Humanity
One of Liza’s inspirations for bringing humanity to a brand is Honest Tea, an organic tea company that has built its reputation on integrity and sustainability. In parallel, it’s always had marketing tactics that were very grassroots, as opposed to big glitzy television campaigns. Since Honest Tea’s founding in 1998, it has landed a substantial and loyal following. In that vein, Landsman is building Jet’s image around transparency and fairness. She does this by making Jet shoppers feel like they’re both a part of the business and clued into its decision-making.
That’s a fine approach and one that has worked for a number of companies, many of which you can find in the aisles of Whole Foods. However, there is one problem with building a reputation for being open and fair-minded — you’re accountable to your community. When you have principles, you have to remain steadfast to them or else witness a revolt from your most devoted fans. Take Etsy, a marketplace that built its name on creating a platform for helping launch small merchants. The marketplace (a B-corp) amassed an ardent horde of merchants early on thanks to its company ethos, which helped grow the platform. But as the company got bigger it had to change some of its policies in order to appease investors, leading its core users to outrage.
Etsy, which went public earlier this year, has managed to strike a balance, but it’s not an easy feat.
“We’re going to spend $100 million on marketing to make sure the message on the value proposition is clear and that we’re bringing that volume of shoppers to the site,” says Landsman, who is in the process of launching a major advertising campaign that will span television, billboards, and localized events.
Creating value offsite
To get an idea of what Jet’s campaign will look like, examine one of its most recent efforts. Last week at the 2015 BlogHer Conference, Jet set up a table and promoted its brand by offering to box and ship swag bags for 500 conference goers.
“They loved it,” Landsman told me yesterday. She said people at the conference were pleased with the campaign, because it was thoughtful. “‘You actually thought about what we need … instead of giving me another cuddly cool toy,'” says Landsman, describing some of the reactions she encountered at BlogHer.
The idea of a marketplace that’s paying attention to your needs is core to how Jet will appeal to customers. Jet isn’t just trying to save customers money on its platform. It’s trying to save customers money, period.
One of the biggest hurdles to online shopping has been solved by the evolution of digital payments. I can buy plane tickets, a bridesmaids dress, and travel-size toothpaste at three different stores within a span of 10 minutes on my phone, thanks to innovations like Apple Pay. Scan my fingerprint and I’m done.
In seeming acknowledgement that people don’t necessarily need, or even want, a unified marketplace, Jet created a rewards program for customers who shop at its site. Through the Jet Anywhere program Jet shoppers can get cash-back on purchases at over 600 online retailers including Asos, Nordstrom, and Sephora. It operates like a traditional rewards program, giving customers cash rewards they can spend on its platform. For example, an $80 purchase at Adidas.com will yield shoppers $8 in Jetcash (or 10 percent cash-back on their Adidas purchase).
Jet Anywhere isn’t a seamless experience the way swiping a rewards-based credit card at a store is; you have to forward your digital receipt to Jet via email. But it represents yet another way that Jet is aligning itself as a brand for the people.
And this is where Jet might succeed. After all, there is lots of growth potential for digital commerce as people increasingly shop from their phones. If consumers believe that Jet can not only deliver deals, but is invested in its customer base, then it will likely be able to rake in the customers it needs to scale. People are often willing to buy into a company that’s interested in providing value to them.
But authenticity is hard to prove and appealing to customers’ emotions is a risky undertaking. Hearts are not easily won.
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