Thursday, June 18, 2015

Prime Competitors Knocking on Amazon’s Door

Prime membership. What an innovative sales technique. Not only does Amazon tie consumers into using their marketplace to buy with all they offer with Prime, but they generate revenue by tacking on a pricetag to their consumer rewards program. According to Consumer Research Intelligence Partners, Amazon Prime members spend over double the amount non-Prime members spend per year ($1500 Prime, $625 non-Prime). With all of the success Amazon is seeing in direct response to Prime, there are bound to be copies popping up in competition.

The first half of this year has seen eBay, Overstock, and Walmart making statements to the effect that they will more seriously compete with Prime. What they intend to offer their members differs a bit from what Amazon is offering.

eBay: Currently, eBay is testing a loyalty program in Germany, eBay+. It costs $17-$22 per year, and offers free shipping. For sellers, eBay is offering better product placement as well as discounts on fees. They are also offering sellers shipping and returns reimbursements.

Walmart: Walmart will be rolling out their program for a $50 per year fee by invitation this year. So far, they don’t intend to compete with Prime’s free video streaming, but they will be offering free 3 day shipping on over 1 million items. They are also testing grocery delivery as well as grocery store pick-up at no additional charge to what customers pay shopping themselves in store.

Overstock: Currently, ClubO competes on their price point. They are at $20; substantially cheaper than Prime. They offer free shipping on every order regardless of size, money back rewards on certain purchases, and early access to certain offers. They plan to increase their competitiveness in the future with a streaming service similar to Prime’s.

ShopRunner: Shoprunner competes with Prime on their price point as well as the number of places a customer can use their membership. Shoprunner costs $79 per year, and there are over 100 stores in their partner network.

Take a few minutes to look at a couple of great articles highlighting the trend to directly compete with Amazon Prime; “eBay Preps Amazon Prime Competitor” and “Walmart Eyes Amazon in Potentially Costly E-Commerce Battle”. The best thing any online seller can do to cope with the battles of these retail and ecommerce giants is to remain flexible. Do your best to not have all of your eggs in one basket. If you currently sell on one marketplace, perhaps now is the time to start thinking about adding one or more marketplaces to your etail business.

Barbara Anderson
Marketing Coordinator