Interesting Amazon Locker and Prime developments

November 6, 2012

ChannelAdvisor ChannelAdvisor By ChannelAdvisor

Amazon had two small news items this week that I thought were interesting for sellers to think about:

  1. First, Amazon and Staples announced a relationship which will place Amazon Lockers inside of their stores.   Staples has ~1900 stores in North America and its not clear how many stores this will involve, but it is a very interesting development.   According to a recent Comscore survey of consumers, 61% of consumers said they would rather have a product delivered to a store for pick-up vs. paying to have it delivered to their home.

Comscore_in_store_pickup

Brick and Mortar companies such as Wal-mart, Macys, have been investing a lot in this capability and by putting Amazon Lockers in 1900 Staples stores, Amazon could have just eliminated this core advantage that omni-channel companies are just starting to explore.

Also, Geekwire is reporting that they are seeing Amazon Lockers also start to appear in Radio Shacks (~4700 stores).  There are a couple of unknowns we’ll be tracking:

  • Will Amazon Lockers be in all Staples or just select?
  • Will Amazon offer discounted/free delivery to these stores?
  • Will there be expedited shipping available to the stores?

2. Second, Amazon has been testing today a new option for the Prime program.  Historically the only ways you could get prime would be:

  • Annual sub for $79
  • Order a Kindle Fire and get a free month
  • Amazon moms and students

Now it appears that Amazon is testing a $7.99 monthly option (hacking netflix has this screen capture of the test)

Amazon_prime

What’s interesting about this is it definitely lowers the commitment level ($80 is a lot more than $8) significantly to jump on the Prime bandwagon.  By our estimates – 10% of Amazon’s 188m active buyers are in the Prime program (18m).  But they spend 3-4 times as much as the average buyer so they represent more like 30-40% of the ‘buyer wallet’.

This test is interesting because anything that Amazon can do to grow that Prime audience is a good thing for growing Amazon – both first and third party.

 

This blog post was written by Scot Wingo, CEO of ChannelAdvisor.  I am long Google and Amazon and eBay is an investor in ChannelAdvisor.