Amazon is bringing lots more exciting features and perks for its Prime subscribers, after its recent price hike. In addition, Amazon has also revealed two more exciting products. So, what’s cooking? Shashank Venkat finds out
Last week, subscription giant Amazon announced
that it will be increasing the price of its popular Amazon Prime subscription service from $99 to $119 per year. While users may not have been too enthused after the move, Wall Street had reason to cheer as the company recently revealed that it now has 100 million Prime subscribers
across the globe. Reports estimate that this price riseshould help Amazon generate $2 billion in additional revenue, clearly cementing Amazon Prime as the numero uno subscription bundle across the globe.
Currently, an Amazon Prime subscription gets you free and fast shipping, access to Amazon Prime Video and Amazon Prime Music along with some special discounts and early bird deals. Along with the recent price increase, the technology giant is planning to introduce more features to the subscription bundle, which will be especially valuable to grocery shoppers. The purported move is in line with Amazon’s continued efforts to integrate Whole Foods
within its ecosystem and improve the overall Prime experience.
Amazon Prime - Whole Foods’ new loyalty program?
More specifically, Prime subscribers will soon get access to lots of Whole Foods-based perks. According to reports
, Prime members will get an additional 10% discount on Whole Foods products, and that applies even to already discounted products. Other perks include free delivery of Whole Foods products to Prime members at certain locations, 5% additional cash back on Visa rewards cards and other member-only deals. It is noteworthy that Whole Foods has already shut its own loyalty program.
The move makes a lot of sense for Amazon. While Prime subscribers will be happy about getting access to more perks with a nominal $20 annual increase, the move will greatly consolidate Amazon’s position in the grocery industry. The CNBC report revealed that 75% of Whole Foods shoppers are Amazon Prime subscribers, but only 20% of Amazon Prime members are Whole Food shoppers. So, there is a huge chunk of the market which is left unserved by Amazon. The new move should be able to push a lot of Prime subscribers towards trying out Whole Foods products.
will also get an opportunity to reach a new shopper base, which is critical considering the increasing competition in the organic food industry.Amazon Prime benefits will also reduce a traditional friction point for Whole Foods’ shoppers – high prices.
Jeff Bezos and co. have always been working towards making the Whole Foods shopping experience more integrated with Amazon. Earlier this year, Amazon made Whole Foods products available on its Prime Now
service. There were also reports
that the company wanted to leverage its Whole Foods acquisition with Amazon Go as well.Furthermore, Amazon apparently wants to make Whole Foods stores a pickup point for its online customers who can order groceries on the Amazon website or app and pick them up from Whole Foods.
And it doesn’t just stop here…
There is lots more action happening in the Amazon stables! The company has also launched a $23 monthly subscription book box
for kids. Called the Prime Book Box, subscribers will receive two to four books, depending on the child’s age. This subscription service will be available on a one, two or three-month basis depending on the plan chosen by the subscribers. The service seems like a good way for Amazon to collect data about kids, who obviously do not have their own Amazon accounts. The service is currently available only by invitation for Prime members, again enhancing the allure of Prime.
Expanding its set of private label brands, Amazon has also launched Wag,
a line of pet products. With consumers in the US expected to spend $30 billion this year on pet foods alone, there is a huge market for Wag
to tap into. Again, Wag
is available only to Amazon Prime subscribers.
Amazon vs Walmart
While groceries may be the favourite battleground for Amazon and Walmart
, both companies are also driven by the quest for global domination. Walmart was in advanced talks with Flipkart, India’s leading e-commerce player, to become its largest shareholder; now Amazon has made an offer to buy the Indian e-commerce firm
. Who will win this mini-battle?
In a nutshell, it appears that Amazon Prime is slowly becoming a service which will be essential to the Amazon experience. With Amazon continuing to add irresistible perks to this service, it does look like Prime can indeed justify its $119 yearly price tag. What do you think?
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