Amazon Prime's new strategy aims at low-income families
- 7 years ago
Amazon Prime's $5.99 monthly discount has industry experts puzzled, but the company's newest strategy is one to take notes on.
Prime plans to target lower-income customers who receive government assistance through the Supplemental Nutrition Assistance Program, or food stamps.
Since Amazon has over 70 percent of upper-income households hooked to its services, it's expanding its growth to other markets for continued success.
Retail industry consultant Doug Stephens explained the appeal of the service saying, "Prime is the gateway drug for the heroin that is Amazon.
If this can get new people into the Amazon ecosystem, it's very sticky."
Prime members were also reported to spend 2.7 times more than regular Amazon users, and people renew their membership at a rate of 96 percent.
The company's biggest competitor is Walmart, who makes 1 out of every $5 in SNAP benefits, so appealing to a different market would send the message that Amazon is not to be rivaled with.
Prime plans to target lower-income customers who receive government assistance through the Supplemental Nutrition Assistance Program, or food stamps.
Since Amazon has over 70 percent of upper-income households hooked to its services, it's expanding its growth to other markets for continued success.
Retail industry consultant Doug Stephens explained the appeal of the service saying, "Prime is the gateway drug for the heroin that is Amazon.
If this can get new people into the Amazon ecosystem, it's very sticky."
Prime members were also reported to spend 2.7 times more than regular Amazon users, and people renew their membership at a rate of 96 percent.
The company's biggest competitor is Walmart, who makes 1 out of every $5 in SNAP benefits, so appealing to a different market would send the message that Amazon is not to be rivaled with.