Amazon is willing to lose hundreds of millions of dollars annually on the Amazon Prime customer-loyalty program because of the increased consumer spending it creates.
“The cost of Prime underscores the willingness of Amazon Chief Executive Jeff Bezos to shell out money as he continues the company’s transition from an online retailer of paper books, to an Internet megamall that sells an array of products from various companies, to a seller of digital goods and even its own devices, such as the Kindle Fire tablet computer,” reports The Wall Street Journal.
“[Fiona Dias, VP of rival service Shoprunner] estimated that after joining Prime, members tripled the amount of money they spent on Amazon to $1,500 a year,” the article indicates. “She estimated up to 40 percent of Amazon’s domestic revenue, which totaled $18.7 billion in 2010, comes from Prime members.”
Some investors look unfavorably on Amazon’s subsidizing (the company loses $90 a year on each Prime subscriber and sells each Kindle model at a loss of $10+), but analysts say the costs are offset by Amazon’s profitable website.
Prime will be offered free for 30 days on the new Kindle Fire.
Apple’s new retail store app for iOS is expected to launch today, and will include two major features: 1) Online ordering with retail store pick-up, and 2) Self check-out at retail locations.
The new services have already started at a number of Apple locations in California and New York City.
A customer will be able to order an in-stock product online and pick it up approximately 12 minutes later — skipping lines and registers, then simply picking up and signing for the product.
If customers order an item that is not in-stock, they’ll be a given a pick-up date right after the online purchase is completed. All products sent to an Apple store will include free shipping.
With self check-out, customers are encouraged to launch the Apple Store app on an iOS device to purchase in-store items. “You scan the product with the camera on your device in the app, click purchase, and it will charge whatever credit card is associated to your Apple ID,” reports BGR.
The company expects the new program will generate a 30 percent increase in sales.
Shall I Buy is a free iPhone app with the goal of combining instant social feedback for shoppers to make better purchasing decisions and possibly combat buyer’s remorse.
A shopper can share a video, picture, price and location to engage potential followers and incite comments, and allows sharing of links through Facebook and Twitter.
“The app is done simply, taking heavy styling cues from Instagram, but in doing so it’s effective and easy to use,” reports TheNextWeb.
The post cites two potential downsides: 1) By default, users receive a great number of push notifications, and 2) It would be helpful to have “a way to configure notifications inside of the app itself,” rather than going to the website.
Robert Scoble equates it to “Foodspotting for everything else.”
Amazon is willing to lose hundreds of millions of dollars annually on the Amazon Prime customer-loyalty program because of the increased consumer spending it creates.