Amazon has removed restrictions that prevented Prime members from using one-day shipping on items less than $5, according to a report from Recode.
One-day shipping on low-priced items
Amazon Prime members are now able to purchase single items less than $5, and as little as $1, on Amazon and receive with free one-day shipping. Before this move, Prime members would need to add lower cost items to orders through Amazon’s “Add-on” tool. With Add-on, customers were able to include add-on items for purchase with over $25 of items shipped to the same address. This allowed Amazon to offer low-priced items that would be cost-prohibitive to ship on their own. According to the report by Recode, Amazon has now removed the Add-on tool.
Competing with bricks-and-mortar stores
The move enables Amazon to compete with other retailers with bricks-and-mortar stores where shoppers would typically go to complete one-off purchases. With the added convenience of buying online and having the items delivered, shoppers will have fewer reasons to visit a competitor store in person. It also offers greater choice for customers, particularly in terms of pack sizes. More sales, taken from competitors, will allow Amazon to grow its food and consumer goods business. The move will impact Amazon’s profitability and we’d expect it to continue to grow Amazon Web Services (AWS), Amazon Advertising, Fulfilled By Amazon, and potentially develop a private label.
Keep up to date with the latest developments from Amazon
See the latest Amazon news here and IGD Retail Analysis subscribers can learn more from our Amazon Strategic Outlook presentation.
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