Report: Jet's mindshare growing, but still unknown to half of shoppers

Dive Brief:

According to numbers crunched by business research firm Prosper Insights & Analytics, online retailer Jet continues to face an uphill climb in its battle to topple Amazon, thanks to Amazon’s entrenched Prime subscription benefits, low prices, excellent customer service and exclusive devices like the Dash button and Echo virtual assistant.
More people are now aware of Jet and have bought something there. In August 2015, 81.4% of U.S. shoppers hadn’t heard of Jet and only 7.7% had made a purchase there, while as of last month, 31.2% have heard of Jet but haven’t visited, and 14.3% have visited or made a purchase there.
Despite Jet's sales growth and increased visbility, more than half (54.5%) of consumers still aren’t aware of the company, Prosper states.

Dive Insight:

Jet by and large has come through on its low-price promise, though that changed somewhat after the company ended its $50 per year membership model, which it initially said would be its sole source of profits. On launch day, for example, a study from consumer insights firm Profitero found that, on average, Jet did deliver prices on “exactly-matched products” that were 9% lower than Amazon and 6% lower than Wal-Mart.

While comparisons to Amazon are natural, Jet may not even be really trying to compete with Amazon (or Wal-Mart). In an interview with Retail Dive last February, Jet CRO Scott Hilton dismissed Amazon has having a “very small fraction of the core retail space.” And Profitero VP of strategy and insights Keith Anderson told Retail Dive last year that Jet appears to be reaching for new online customers rather than stealing existing shoppers away from Amazon.

“If you take Jet’s comments at face value, I don’t know if they have a strong ambition to convert a lot of shoppers from Amazon to Jet,” Anderson said. “They seem to be trying to convert new shoppers to be online shoppers, which I find to be a risky gamble. They’re interested in the household that values money more than time… It’s such a precise segment of shoppers that they hope exists.”

In any case, at least when it comes to Amazon’s dominance on the web, Jet may not be able to make much of a dent. Prosper reports that the millennial audience’s interest in Jet appears to be growing at a much slower pace compared to older generations: 11.6% of baby boomers have visited or made a purchase at Jet (an increase of almost 300% since last August), 14.5% of Generation X members have (up 70%), and 19.4% of millennials have (an increase of just 35%).

Amazon’s Prime program is a major factor behind its stickniness. 42.3% of millennials are members (or have access to Prime in their households) a 23.1% bump from August, while boomers’ Prime access has risen 25.8%. Jet, meanwhile, last fall ended its subscription model in factor of higher prices and dynamic pricing.

“With Amazon actively courting shoppers with Prime benefits, low prices, stellar service, and innovative, exclusive products (read: Dash Buttons, Echo), it appears that the online powerhouse would have to make a major misstep in order for Jet.com to make significant inroads with shoppers,” Pam Goodfellow, principal analyst/consumer insights director for Prosper Insights & Analytics, writes in Forbes. “Remember, though, that every retailer has to begin somewhere—once upon a time, Amazon was just a bookseller.”