Amazon’s Interesting Tweaks to Prime – No Rush Shipping and Add-On Items

May 11, 2012

ChannelAdvisor ChannelAdvisor By ChannelAdvisor

One of the most fun things about following and working with Amazon is the constant drumbeat of new features that come out without any fanfare.  Sometimes I scratch my head and wonder: “when did featureX come out?!”

Some tipsters and folks around the office have found two new features/experiments/tweaks/enhancements that Amazon is showing that have interesting impacts on the Prime program.

They appear to be called: No Rush Shipping and Amazon Add-On Items – details on each follow.

No Rush Shipping

Logic tells us that it costs Amazon more to send your Prime or SuperSaver items next day.  But with Prime, you get next day ‘free’, so it is the default.  But what if you really don’t need it the next day?

Well, No Rush Shipping is designed to give you that option + a reward.  Here’s a screen shot:

Amzn_no_rush_shipping

So instead of the normal two options you get in Prime shipping mode (2 or 1 day) you get the 5-7 no rush option AND Amazon gives you a reward.  In this case it’s $1 to spend on some MP3s.  That’s the only offer we’ve seen, but you can imagine that Amazon could put a bunch of offers out there and even vary them by a ton of inputs such as: weight of the item, spot price for shipping, cubic volume of your order, nearest FC, etc.

If anyone sees offers other than the $1 for MP3s, let me know as it will be interesting to watch how this program progresses.

Amazon Add-On Items

This next one is interesting and shows you that the folks at Amazon are always thinking of innovative ways to solve the challenges we face in the World of e-commerce.

One of those challenges is when you think about all the stuff you buy on a regular basis, frequently you’ll buy something smal with a low ASP that you have a specific need for.  The classic for me is scotch tape.   Let’s say….oh that Mother’s day is around the corner, you have your gift and you start to wrap and ‘doh’ you don’t have any tape.  With Prime I actually do find myself throwing this type of stuff into my cart, but Amazon cleverly only sells large quantities (box of pens, 5-pack of tape) vs. the quantity one you need.

The Add-on program is designed for this specific situation.

First, A ton of new selection is available on Amazon flagged as add-on items. Here’s an example of a $4 pack of cards.  They are designated with a blue flag that looks like this->

Add_on_item_flag

The way it works is if you add these on to something that is $25 or more, they ship for free.  Otherwise, you can’t really buy them.  So think of them as special SKUs with a “have to combine with cart > $25 to get free shipping” requirement attached to it.

Add-on Item Buyer Experience Detailed Walk-Through

This program has the potential to be a real game changer, so I want to 100% walk through the buying experience.

Step1 -Search

Your normal entry to an item is search and this is how they show up: (the red box is mine)

Add_on_serps

Step2 – Item page

Once you land on the item page, you will see a couple of things that are different.  The buy box is blue and has add-on item messaging:

Add_on_item_buy_box

Here’s the wording Amazon uses on the item pages and there’s even a page on Amazon with details here.

Add_on_item_descript
 

Step3 – Add to Cart

Now you add an item to the cart and (assuming you have a fresh cart) you now see the clear messaging that this item will not checkout until you >$25.

Add_on_item_cart

Step4 – Cart hits $25 threshhold, checkout and get Add-on with free-ship.

Now we add enough that our cart is > $25 and the ‘add-on item’ goes ‘hot’ and will be included in our next shipment as part of Prime.  Before that point, you can not check out with the add-on item.

Add_on_cart_complete

There are a couple of interesting situations to think through:

Situation1 – You have a < $25 item and an add-on in your cart

If you order something else < $25, you can still get that item, but the add-on won’t ‘release’ and Amazon will ‘save it’ for you next time:

Add_on_saved
Situation2 – you have > $25 in cart, and delete down < $25

If you are devious like I am (I started out in QA, what can I say?), you can’t trick it by adding a bunch to cart, starting checkout and then editing the cart back down < $25 (drat!):

Add_on_delete
So even though the add-on was released, in this user-flow, Amazon is going to completely nuke that from my cart.

Why would Amazon have an add-on item program?

This program is very interesting from a number of angles.

  • It does solve a general e-commerce problem that there are these items that have prices < the cost to ship an item that don’t make any sense.  Think of a dollar store.  You can’t put any of that stuff online because of the threat of a $1 item going out in a $6 fedex box.
  • Wall-St types will love this, because it does allow Amazon to establish a floor on the shipping cost.  You can paint a doomsday scenario with Prime where someone orders a pack of gum every day and Amazon loses $6 * 365 = $2k on that user per year. Previously that floor was established via the ‘selection lever’ – Amazon just doesn’t make it available.  But at Amazon, Selection is a religion, so you can imagine they have been thinking about how to solve this for a while.  How do we add that $.01-$8 slice of selection, without losing our shirts on shipping?
  • Also, if this type of inventory is possible, you’ll see less and less carts with AOV < $25 over tiem.
  • If I’m a manufacturer or this type of product, this could be a huge win for me.  A lot of the consumer product goods fall into this category: toothpaste, toothbrushes, bandaids, Tide, mouthwash, nutrition bars, etc.  While these items are on Amazon, they tend to be bundled > $25 to solve the shipping problem – and not everyone needs a pack of 30 toothbrushes.  So perhaps, this program will explode out the actual units sold by offering singles to consumers.
  • Prime users.  As an ecommerce industry person, I get this.  As a consumer and avid Prime user, I’m not sure.  I’m kind of supposed to get everything I want for 2 day shipping and I paid my $80 for that.   At first, the Amazon program feels like I’m back to SuperSaver – i have to spend $X to get free shipping, but after reading the details and messaging through the flows, it is much clearer that I still get free shipping on < $25 items, but these specific items need to tag along.  While clear to me, it’s pretty nuanced and it will be interesting to see if consumers come along for the ride and view it as part of the Prime benefits, or maybe they will perceive it as a negative.

 

What do you think about the programs?  Sound off in comments.

SeekingAlpha Disclosure – I am long google and amazon. eBay is an investor in ChannelAdvisor where I am CEO.