On July 21st, 2015 jet.com went live with the aim of taking on Amazon and other online retail giants by offering cheaper prices in a subscription-based model. Immediately, traffic to the site soared, with 6.8 million worldwide visits in July 2015 followed by 12.2 million in August. The site’s traffic peaked in January 2016 when it saw 27.5 million visits, almost all of which came from within the US.
In July 2015, when Jet first launched, the e-commerce site relied heavily on direct and referral traffic, which combined for 79% of its desktop traffic. By January, however, paid search had become the dominant traffic source, accounting for more than 50% of the site’s desktop traffic over the month. This strategy of ramping up paid search helped Jet maintain a steady stream of traffic even as other sources such as direct, referrals, and organic search diminished.
Overall, when looking at traffic to jet.com in the first half of 2016, 82% of its desktop search visits were from pay-per-click search ads, and Jet invested a significant amount of resources bidding for its own brand name keyword. Of the top 5 keywords that brought the site traffic, all 5 have the name ‘jet’ in them, and on average, Jet paid for 41% of these branded search visits. Compare this to amazon.com, which paid for 9% of its desktop search traffic over the same time period, and it becomes evident that Jet struggled to gain market share even for its own keywords.
Putting aside traffic and traffic sources, Jet has fallen far below its competitors when examining its website’s engagement stats. From January to June 2016, jet.com desktop visitors spent an average of just 2½ minutes on site, visiting 3.4 pages. Furthermore, the site had a bounce rate of 63%, almost double that of ebay.com, and significantly higher than both amazon.com and walmart.com.
The good news for Jet is that only 13 months after launch, the online retailer is in talks with Wal-Mart to purchase the e-commerce company for a reported $3 billion. If the deal goes through, it would mark a significant step by Wal-Mart to gain more of the digital market share from its online rival, Amazon.
Amazon is wildly successful in the online retail world, while Wal-Mart has struggled to keep pace. According to Forbes, over the last year, Amazon captured $82.8 billion in online sales, while Wal-Mart had only $13.6 billion. Furthermore, though walmart.com currently only stocks 11 million products VS amazon.com’s 260 million, Jet offers them an opportunity to grow their capacity at an accelerated rate.
On website visits alone, this is a daunting task. Over the first half of 2016, amazon.com had 1.6 billion US visits, compared to 240.5 million for walmart.com and 23.1 million for jet.com. However, when looking at the US app landscape, Wal-Mart is in a much better position. Amazon’s rebranded Amazon Shopping app passed Walmart on Android installs in September 2015, but the two apps have remained neck and neck ever since. Meanwhile, Jet’s Android app has seen a slow but steady growth, reaching 0.37% of all US Android phones in July 2016, compared to 0.28% at the start of 2016.
For Jet, despite their difficulty in finding a wide and loyal audience, they successfully built a subscription-based e-commerce store so attractive that Wal-Mart is looking to acquire it for $3 billion. Armed with Jet’s warehouses, products, customers, and employees, Wal-Mart hopes to up their digital game and better compete with titans like Amazon and eBay.
If this ordeal has proved anything it’s that Jet cannot take on Amazon on its own, but now, with this deal in place, Jet should help Wal-Mart soar.