Amazon’s New Service All About Moms and Babies
Amazon.com has announced the creation of a free subscription
service, Amazon Mom, intended to make life easier on busy moms, dads and others
taking care of babies and toddlers.
The service offers discounted prices on
disposable diapers and wipes with new members receiving free two-day shipping
for three months through the Amazon Prime service. Members can earn an extra
month of free two-day shipping for every order of $25 or more on baby items.
"We understand that children are very rewarding and at times can be expensive," says
Doug Herrington, vice president of consumables at Amazon.com, in a statement. "Amazon
Mom makes it easier than ever for families to get everything they need, from
strollers and diapers to digital cameras and blenders, all with great prices
and fast free shipping directly to your doorstep."
Mr. Herrington told Reuters that
the new program builds on an existing strength for Amazon.
"We sell a great deal of diapers and wipes and the new mom discussion
boards and on our site talk about the great subscribe and save offers for diapers
and wipes," he said. "So we decided to focus on the area we’re strong
on now."
The new Amazon service will compete directly with other online
offerings such as Diapers.com as well as a host of traditional retailers
in a wide range of baby-related categories. The company is counting on ease
of ordering and low prices to help it achieve share gains in the category.
Discussion Questions: Does Amazon.com have a winner with Amazon Mom? How will
Amazon’s more focused go-to-market strategy affect sales of products such as
diapers and wipes in other retail outlets?
Smart retailing…may not make them a ton of profit on diapers and wipes but once you get them into “prime” it changes the economics of buying all sorts of baby stuff at Amazon vs. the other places…especially in a no tax state against the “bricks.”
Moms who want to save are going to Walmart or a club store. Moms who want convenience are shopping grocery delivery. Moms who want green use diaper services. So, where is this business coming from?
Babies and families have a lot of last-minute needs. For a truly busy mom, combining shopping trip missions is a way of getting everything at once, and saving on shipping, and avoiding waiting for delivery. (Or wondering if the package is sitting in the rain while Mom is out of the house.)
It seems like a service that was created not so much in response to a real shopper need, but in response to Amazon’s desire to increase its delivery of CGPs. Sure, bundle all the baby stuff and target parents. Easy enough. But the real point of difference is a bit elusive to me.
After seeing Amazon fresh grocery delivery trucks on the streets of Seattle last weekend, my response is “Why not?” Amazon continues to identify one market opportunity after another, and they have built years of credible brand equity around their pricing, convenience and execution. In a way, Amazon has expanded from its original roots as a book seller to become the department/discount store of the e-commerce age.
I think you’ll see Amazon looking at a variety of incremental avenues to build share of household.
Will this one work? Hard to say, but the better question is what does success look like to Amazon?
I think it probably looks a lot less like “capturing significant market share” in a traditional category and a lot more like building loyalty to as many addresses as possible.
Perfect. No big up-front investment, and all it can do is increase incremental sales however you slice it. It’ll also help build more use of Amazon by households in prime spending years–the same households supermarkets crave. Not a home run, but yet another good solid single for Amazon.
Amazon’s Mom’s is a fantastic concept that if executed properly will realize exceptional results.
Interesting comments. Think it’s a little late but as Amazon always does, they’ll execute so probably a winner. They have a brand advantage now.
Genius. This is the closest we have come to a subscription service for basics. Moms of little ones just do not have time to search for bargains, and juggling bulky items while carrying an infant is no fun. If Amazon can gain a reputation as a one-stop shop for Mom, they could realize benefits for years to come.
If moms are a sizable customer base and if the new service can provide information and a price advantage for products and services that are important to these moms, then there is a real opportunity for building loyalty with a specific group of consumers. Great test.
Moms shop. Without moms shopping, kids and dads would be dressed in rags and eating three-day-old Chinese leftovers. Single adult males might dress well but essentially are eating three-day-old Chinese leftovers every day of the week. If you are a retailer in almost any vertical, you want to reach moms. To call Amazon’s move a “no-brainer” is in itself a no-brainer.
While Amazon started as a book retailer, they never defined themselves as that. They defined themselves as an internet retailer. That difference has taken this company in multiple directions as they have leveraged their brand, reputation and most of all their customers. They understood from the beginning that people who buy books buy other things and their objective is to sell everything.
Doug Herrington’s comments give the clue. He references discussion boards by those who are already buying basic baby products in huge quantities. They used insight to refine an offering that would serve this customer base and add more margin to the business.
Be assured, Amazon has been doing the same with all their businesses. They are watching their customers, listening to what they say and then designing their business to meet their customers’ needs.
Amazon will not lose in this market. They will take business from every other retailer, online or on the street.
Every retailer worth its wipes has jumped on the mom bandwagon (some acknowledging it openly, others targeting on the stealth). I’ve said it before and I’ll say it again: Amazon’s aisle is a bit TOO endless and arbitrary for me — even the most specific searches invariably bring up hundreds of unrelated items. As such, Amazon is smart to take a tip from the bricks by exploring customer segmentation models that might bring more focus to searches and create strategic virtual adjacencies.
Smart service, good retailing and a hot market! Amazon is proving that it is a retailer of the future and is moving in many directions at once. This is a great marketing move for their organization and their model.
I am not going to bet anything against Amazon’s new mom and babies program. After all, we are talking about Amazon here. I do have some difficulty seeing this as a big profit mover for them. But Amazon is thinking at levels far beyond mine. It will be interesting to follow and see where this leads. It will not end with diapers. I assure you of that.
This is a great segment for a smart retailer like Amazon and its skills at associative selling because it includes low-margin-high-volume necessities and ridiculously high-margin products with high emotional content.
Couple that fact with the convenience and the service levels that Amazon can offer, and you have a winner.