Amazon – the U.S.-based online retailing giant – already owns the high-income shopper segment in the country but now it is trying to attract the customers who have less income at their disposal. The e-commerce giant announced on Tuesday that it is offering a 45% discount on Prime memberships, which will decrease the price from $10.99 month to $5.99 a month.
Amazon looking to attract the lower income group
According to the e-commerce giant, the discount will be offered to the U.S. residents who are getting government assistance. The shoppers who have an Electronic Benefits Transfer card will now be eligible to sign up four years in row for this promotion. The Electronic Benefits Transfer card is used by customers for benefits like the Women, Infants, and Children Nutrition Program.
According to Amazon Inc., customers who get benefits like through the food stamps or through the Supplemental Nutrition Assistance Program can now pay $5.99 per month for membership. The Prime Membership would include unlimited streaming of movies and TV shows with Prime Video as well as free shipping.
This move by the online retailer comes as part of its efforts to attract the lower income group of the United States. A year earlier, the e-commerce giant had first introduced the $10.99 monthly payment option for Prime. Previously, the payment option was only available for an annual fee of $99. The e-commerce company is bringing this monthly payment option as a way to attract lower-income customers. These are the customers who probably prefer other retailers, like Walmart.
Amazon would start accepting food stamps this summer
The growth of the Prime membership since then has been the strongest among people who have earnings of less than $50,000 yearly, according to a R.W. Baird study. Earlier this year, the e-commerce company said that it would begin accepting food stamps for its grocery items starting this summer. The grocery service of the e-commerce giant costs an extra monthly fee in addition to the Prime membership.
It is not certain if lower-income customers, who are taking advantage of the new Prime offer of Amazon, would get a discount on the grocery delivery fee as well. The Chief Executive officer of the online retailer said that he wants to add so much value to Prime that it becomes irresponsible to not use it.