Having already secured a strong market position among high-income shoppers, Amazon has its sights set on lower-income consumers.
“On Tuesday, Amazon announced that it is offering a 45 percent discount on Prime memberships — $5.99 a month instead of $10.99 month — to U.S. residents receiving government assistance,” Recode reports. “Shoppers with an Electronic Benefits Transfer card — used for benefits like the Women, Infants, and Children Nutrition Program — are eligible for the lower price but they also have to re-qualify every year for up to four years.”
The report notes that Prime membership has been experiencing its strongest growth among households making less than $50,000 annually since the monthly payment option was introduced a little more than a year ago.
The new offer “follows an announcement Amazon made earlier this year that it would start accepting food stamps for its grocery items beginning this summer,” Recode notes, adding: “Amazon Prime is the most crucial piece of the Amazon shopping machine, since those customers spend more and buy more frequently than non-Prime members do. CEO Jeff Bezos has said he wants to add so much value to Prime that it becomes irresponsible to not use it.”
The report adds: “Amazon’s discount offering is just the latest salvo in a renewed rivalry between Walmart and Amazon since Walmart last year acquired Jet.com, started by former Amazon employee Marc Lore. The two sides are currently engaged in a price war in packaged goods that is terrifying some of America’s biggest grocery brands.”