[Nfbc-info] Amazon launches a low-cost version of Prime for customers on government assistance

[nancy Lynn]

FYI. The article text is below the link.


-Tyler


Amazon launches a low-cost version of Prime for customers on government
assistance | TechCrunch

Article Link: http://tcrn.ch/2rQS0XP


Amazon announced
<http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2279027>
today it’s making its Prime membership program more affordable to
customers on government assistance programs, including food stamps. The
program, which requires that customers have a valid Electronic Benefits
Transfer (EBT) card to qualify, will bring the cost of Prime down from
$10.99 per month to just half that, at $5.99 per month instead.

The program will be available to any U.S. customer with a valid EBT card
– the card that’s commonly used to disburse funds for a number of
government assistance programs, including Temporary Assistance for Needy
Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and
Women, Infants, and Children Nutrition Program (WIC).

The card will only discount the cost of using Prime – it cannot be used
to make purchases on Amazon.com, nor can it be used to pay for membership.

The discounted membership will have all the perks
<https://www.amazon.com/gp/help/customer/display.html?nodeId=200444160>
associated with Prime, including free streaming video and music, free
photo storage, access to the Kindle lending library, ability to shop
from Amazon’s Essentials – the retailer’s low-cost line of everyday
products, access to Prime Now (where available), and more.

The move will make Amazon Prime more accessible to lower-income
households and families, and could help Amazon shake the reputation that
shopping its site and paying for its membership program are luxuries
instead of more essential services.

That’s different from the Amazon that exists today, where Prime’s growth
has been fueled by upper-income shoppers.

A study from Piper Jaffray in 2016
<http://www.businessinsider.com/amazon-prime-penetration-by-household-income-2016-4>found
that Prime membership’s penetration is highest and growing the quickest
among those households with more than $112,000 per year in annual
income. More than 70 percent of those households have a Prime
subscription, the study found.

However, there are benefits to bringing in the lower-income families
online, too.

Though they may be on assistance, that doesn’t mean they don’t still
need to shop for everyday items – clothing, school supplies, household
goods, personal care items, etc. And in many cases, Amazon Prime may be
offering the better price on a given item, compared with competitors
like Walmart and others. Over time, those savings could add up making
the cost of the $6 per month membership worthwhile.

This is especially true when you work other factors into the equation.
For example, by shopping online, customers won’t have to spend the
additional gas money going to the store and back. And, in some cases,
customers don’t even have a vehicle at their disposal or are elderly,
and require help with their shopping. Online shopping helps with these
concerns as well.

Plus, for families with babies, a Prime membership includes a 20 percent
discount on diapers and wipes subscriptions, which would also positively
impact the household’s budget.

Finally, there’s the fact that Amazon, along with a number of online
retailers, are working with the government on a program that will allow
customers for the first time to use their food stamps (SNAP) via
e-commerce websites.

Announced earlier this year
<http://fortune.com/2017/01/06/amazon-food-stamps/>, the USDA-led
program <https://www.fns.usda.gov/snap/online-purchasing-pilot> is
working with Amazon, Walmart, Thrive Market, FreshDirect, and other
grocers to test how SNAP benefits could be used to pay for qualifying
items – largely fresh goods, like those from Amazon’s Fresh grocery
delivery service, as well as some packaged goods, like cereals, which
are also available through Amazon Pantry. The pilot begins in early 2018.

Bringing SNAP members to Amazon Prime would be a first step in being
able to attract those shoppers, who today receive the bulk (69 percent)
of Federal food and nutrition assistance.

Last year, 44.2 million people per month participated in SNAP. Combined,
spending for all of the USDA’s food and nutrition programs – including
WIC, School Breakfast/Lunch, etc. – totaled $101.9 billion, with SNAP’s
portion at $70.8 billion. That’s no small market – and worth certainly
targeting, it could be argued.

But until SNAP is accepted online, Amazon has been going after
lower-income households in other ways. For example, earlier this year it
launched Amazon Cash
<https://techcrunch.com/2017/04/03/amazon-launches-amazon-cash-a-way-to-shop-its-site-without-a-bank-card/>
– a way to shop its site with a debit or credit card. Instead, customers
can add cash to their Amazon account at participating brick-and-mortar
retailers.

“The ability to shop online has been limited – it’s an underserved
audience,” explains an Amazon spokesperson. “E-commerce companies
haven’t figured out how to help customers who may be uncomfortable
paying with credit cards. The thinking at Amazon is that there’s so much
value [with Amazon Prime] – there’s so much time, convenience, and
savings…we felt like this was one small way to help a customer that’s
temporarily in need.”

Customers can learn more about the program and sign up for a 30-day free
trial at amazon.com/qualify. <http://amazon.com/qualify>