Amazon Offers BIG Prime Discount
Amazon is lowering its membership fee for low-income shoppers, in an attempt to go after the stronghold Walmart currently has on the market. Amazon said Tuesday that it will offer a nearly 20% segment of the U.S. population – those who obtain government assistance – a $5.99 monthly Prime membership, less than the $10.99 a month or $99 annual plan for other consumers. The membership buys access to unlimited two-day shipping, video and music content, photo storage and other rewards.
The monthly payment option was seen as a way to attract lower-income customers – the type of shopper who might otherwise shop Walmart – who could not spend $99 at one time. Since then, Prime membership growth has been the strongest among households making less than $50,000 annually, an R.W. Baird study found.
The offer follows an announcement Amazon made earlier this year that it would start accepting food stamps for its grocery items beginning this summer. Amazon’s grocery store service costs an additional monthly fee on top of the Prime membership. It’s unclear if lower-income customers taking advantage of the new Prime offer would also get a discount on the grocery delivery fee.
“It is part of Amazon’s overarching goal to inexorably move into every corner of retail,” Greg Greeley, vice president of Amazon Prime, said in a statement. “Secondly, it is a direct move to pull consumers away from its chief retail rival Walmart, which has been far more aggressive competing with Amazon on price, offerings, delivery and building out its formidable e-commerce operations.”
Amazon Prime is the most crucial piece of the Amazon shopping machine, since those customers spend more and buy more than non-Prime members do. CEO Jeff Bezos has said he wants to add so much value to Prime that is becomes irresponsible not to use it. Bezos is a revolutionary thinker and what he’s done with Amazon has been nothing short of amazing. We’ll have to wait and see if this latest move pays off for the retail giant.
This is Amazon’s attempt to take over the retail world by knocking all of their competition out of business. It’s obvious that Bezos will do whatever it takes to seek and destroy competition. As long as Wall Street continues to reward Amazon, they will continue to knock out any competition.