Will Amazon team with third-party sellers as a Prime perk?
Through a special arrangement, presented here for discussion is a summary of a current article from The Wise Marketer, a website and newsletter serving the global loyalty industry.
With indications that Prime’s U.S. membership may have peaked, according to RBC Capital Markets’ latest study, Amazon.com may need to add even more perks to drive sign-ups. Some market observers are wondering if more discounts at third-party retailers may work as an incentive.
Already Prime customers who shop at select Whole Foods pay lower prices and get two-hour grocery delivery. Could members who live in cities and towns without Whole Foods start to see similar benefits from their grocery stores?
Speaking to Forbes, Jim Fosina, CEO of Fosina Marketing Group, believes other supermarkets would “jump at the chance to partner with Amazon as a way to drive new customers and existing customers back into the store for yet another visit.”
Jared Berger, VP of client partnerships for Ansira, wondered how Amazon and its existing Prime Now partners, such as Best Buy, Kohl’s and Sears, will “view the Whole Foods /Amazon expansion and see if they adopt a similar program.”
Speaking to The Wise Marketer, Debbie Hauss, editor-in-chief of Retail TouchPoints, said she doubted Amazon would choose to undercut its Whole Foods customers by offering similar Prime discounts to customers of other grocery chains. But if Best Buy and Kohl’s, retailers with which Amazon has existing relationships, “truly believed that their overall profit and revenue would increase by offering Prime discounts, they would do it,” she said.
RBC’s study found that about 90 percent of Americans prefer Amazon over any other online retail site at which to make purchases.
Retail partners, however, would likely shoulder the cost of discounting and, by design, share incremental customer data with Amazon. As attractive as traditionally based brands may find building their customer bases and sales under Amazon’s powerhouse position, “they don’t want Amazon to take over to the point that they lose access to their proprietary customer data,” Ms. Hauss said.
- Third-party retail Amazon Prime’s next perk? – The Wise Marketer
- Could Amazon’s Expanded Whole Foods ‘Prime’ Deals Spread to Other Supermarkets? – Forbes
- Amazon leads e-commerce but challenges remain – CNBC
DISCUSSION QUESTIONS: Would offering discounts at third-party retailers as a perk for Prime be more beneficial to Amazon or the third-parties? What terms of such an arrangement would make sense for both parties?