Thanks, Devon. While I agree that the changes might seem minor, I think that many consumers might disagree! Check out this article I just came across: http://time.com/money/4068884/jet-com-vs-amazon-price-comparison/
The authors did a comparison of the same items on Jet and Amazon, and calculated potential savings of $500 per year on Jet (which is certainly significant!). The article also stated that Jet often undercuts Amazon by a lot more than 5%. Amazon definitely has the resources to compete, but so far hasn’t done anything to that end. We’ll see what the future holds!
Thanks, Yi. I completely agree – I think Jet’s adaptability early on was really key to its success thus far. It’s an important attribute for start-ups, and I look forward to seeing how Jet continues to grow!
Thanks, Devon. I agree – I think it’s definitely a possibility that Jet adds backs its membership fee for customers who opt in, in order to offer select perks. I think Jet could pose a real threat to Amazon, but time will certainly tell! I look forward to seeing it play out as well.
Thanks, Pedro. I agree – I would love to be compensated for the fact that I never return anything!
I think it’s definitely possible that Amazon will copy a piece of Jet’s business model, if it proves to be successful. Amazon definitely has the resources to do so. There’s also a school of thought that suggests that Amazon would simply acquire Jet if Jet poses a real threat, and if it can leverage Jet’s algorithms, customer data, and retailer relationships. I look forward to seeing how this all plays out!
Thanks, Pandamonium712! I agree – retailer acceptance is definitely key to the viability of Jet’s business model. Jet has done a really good job at working with retailers to combat the inherent tension you mentioned above. Giving retailers the ability to market to consumers is one important differentiating factor. Retail partners ship directly to consumers, and can include direct mail advertising in the boxes they ship. In this way, retailers are targeting customers who matter — ones who have already expressed interest in their brand / products (and who will actually open the box that the advertising comes in!). Retailers also have a say in how they want to compete for orders, which they don’t on other marketplaces. For example, if it’s unprofitable to ship long distances, they can choose not to accept the order (Jet will find another retailer that is willing to ship the product to the customer). Lastly, I think the point about offering a competitor to Amazon is really key. As it stands right now, Amazon has much of the leverage in its relationship with retailers. Jet has the potential to give retailers a real choice. Already, there are examples of retailers that have decided to work with Jet.com but not Amazon, including Toys’R’Us, which is pretty telling.
Interesting post, Evelyn! I hadn’t heard of Farfetch before reading your analysis.
One thing I wondered is how much scale is “too much” for this business? Since luxury retail is often associated with a certain level of exclusivity, is being too accessible or far-reaching a detriment for Farfetch’s brand, or for the brands of the boutiques it features? If Farfetch is too inclusive, will it ultimately stray away from the high-end fashion its core customer has come to expect?
Great post, Julia! There seems to be a “click and mortar” trend, where more and more e-commerce start ups are turning to brick and mortar to expand their operations. Though there are high costs associated with opening stores (from the physical store itself to training its staff members), the e-commerce site probably spends an arm-and-a-leg on shipping expenses through its “Home Try-On” program. Has the company given any indication as to what the future holds: will we be seeing lots of Warby Parker stores pop up, or will the business retain its e-commerce focus in the long-term? And do you think that decision will have implications for its brand image as a “hip” way for millennials to purchase glasses?
Great post, Kartik! Blue Apron has always fascinated me – I’ve been meaning to try it out!
One question I had was on Blue Apron’s emphasis on the original, no-repeat menu. It seems as though a lot of resources – both time and money – are being dedicated to this initiative. I imagine it is important to include variety to attract repeat customers. But is this a barrier to economies of scale? Do consumers have the ability to re-order their favorites? A “favorites” feature could be viewed positively by consumers, while saving the company on some of the resources dedicated to the no-repeat menu.
Furthermore, do all consumers get the same meals each week, or is there a variety of meals being shipped out at any given time? And do consumers have the ability to customize their orders (i.e. based on preferences, allergies, etc.)? If there is no uniformity in the fulfillment center, is this a barrier to further high growth?