{"id":5041,"date":"2015-12-09T17:02:56","date_gmt":"2015-12-09T22:02:56","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/jet-com-a-lesson-in-adapatability\/"},"modified":"2015-12-09T17:02:56","modified_gmt":"2015-12-09T22:02:56","slug":"jet-com-a-lesson-in-adapatability","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/jet-com-a-lesson-in-adapatability\/","title":{"rendered":"Jet.com: A Lesson in Adapatability"},"content":{"rendered":"

A New Wave of E-Commerce<\/strong><\/p>\n

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July 2015 marked the much anticipated launch of Jet.com, an e-commerce startup with lofty dreams: to take on Amazon.\u00a0 For Jet, these were well-funded dreams, as the company was able to raise over $200 million even before the site launched.\u00a0 Heralded in the press for its savings-driven value proposition, Jet.com\u2019s business model centered around a $50\/month membership fee, which would enable customers to take advantage of 10-15% discounts on merchandise.\u00a0 The planned business model relied primarily on this fee to drive profits for Jet.com.\u00a0 Its model was intended to target what Jet viewed as the next wave of online shoppers, a group who looks \u201cmore like the general public\u201d than existing, convenience-driven online shoppers.<\/p>\n

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An Early Shift<\/strong><\/p>\n

In October, three months after launching, Jet.com announced that it would abandon the membership fee, effectively dismantling its original business model and sending followers of the company into a tailspin.\u00a0 Jet\u2019s announcement seemed to beg the question: were they giving up on their core business model so soon?<\/p>\n

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However, the decision to overhaul its business model signals a level of adaptability that may prove to be critical as Jet prepares for the long road ahead.\u00a0 Rather than a lack of commitment, this shift demonstrates that Jet is willing and able to experiment to get it right.\u00a0 For many companies, the optimal alignment of business and operating models may not happen right out of the gate, and organizations like Jet.com shouldn\u2019t be afraid to revise their models along the way.<\/p>\n

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Learning from Experience<\/strong><\/p>\n

Jet\u2019s decision to drop the membership fee was driven by lessons learned in its first few months post-launch.\u00a0 During this time, it was able to observe user behavior and gain a more robust understanding of how its customers perceived the site\u2019s value proposition.\u00a0 These initial findings revealed flaws in the membership concept, and pointed to Jet\u2019s \u201cSmart Cart\u201d as a more compelling feature of the site.\u00a0 This feature provides real-time price reductions when a cart becomes less costly to deliver, based on a variety of factors.\u00a0 In revamping its business model, Jet is emphasizing this Smart Cart as its core offering to customers.<\/p>\n

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The Value of the Smart Cart<\/strong><\/p>\n

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Refocusing on the Smart Cart feature allows Jet to do something unique with its business model: engage the customer in the quest to optimize delivery logistics.\u00a0 Customers are incentivized to put together shipments that are less costly to fulfill, and thus stand to benefit financially if they\u2019re willing to make sacrifices on things like delivery speed.\u00a0 In this way, Jet is able to very acutely tailor its operating model to fit the needs of its value-conscious customer base.\u00a0 When shopping on Jet.com, these customers see savings when key factors drive down logistics costs, such as:<\/p>\n