Marketing Amazon

Amazon opens up Prime with less expensive membership for benefits holders

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By John McCarthy, Opinion Editor

June 10, 2017 | 2 min read

Retailer Amazon's latest efforts to entice the growth of its Prime subscription user base among benefits holders may not bare fruit according to a prominent Wall Street analyst.

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Amazon courts low income shoppers

Earlier this week Amazon announced in the US that it will begin offering discounted rates to some customers on government assistance. Under the initiative, the $99 annual subscription will instead be lowered to $5.99 per month to make it more accessible.

Benefits card holders for food stamps or nutrition support programmes will have access to the scheme.

CNBC quotes Gordon Haskett analyst Chuck Grom in saying that the lower income offering may not help attract chase less-affluent shoppers as well as Amazon might hope. While the Prime news certainly falls into the 'risk bucket' for the low-end retailers, we see the concerns (and recent negative stock reactions) as a bit overblown."

Grom's survey of these shoppers found that a total of 80% of respondents were unwilling to pay the fee.

He noted that a lack of household internet access and the fact that consumers have to use their own money, rather than support, to enter the scheme may sully the interest of potential entrants.

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