Amazon customers exchanging slower shipping for video credits
If you talk to any Internet retailer about some of the bigger points of competition, shipping is sure to be a focus of conversation. Many merchants have placed a large emphasis on order fulfillment and shipping as the extra expenses and time of delivery are still some of the bigger drawbacks of shopping online. Sellers are trying to find new ways to offer faster shipping at lower costs to consumers, all while trying to maintain their own profit margins. It’s a complex puzzle to piece together, but one retailers are spending a lot of time assessing.
That makes a recent decision from Amazon quite noteworthy. Amazon has often taken the road less traveled when it comes to distribution. Recently, the Internet marketplace decided to incentivize customers to choose slower shipping options by offering them video credits for Amazon Instant Video.
The Internet marketplace decided to incentivize customers to choose slower shipping options by offering them video credits for Amazon Instant Video.
Rather than jeopardizing margins and the bottom line by providing free two-day shipping to all Amazon Prime members, the retailer takes the opposite approach by making the slower, less costly shipping option more appealing to buyers.
eCommerce analyst Colin Sebastian noted the move could be a huge boon for Amazon. Speaking with Internet Retailer, he asserted that many Prime customers may not actually need an item within two days and only opt into it because they get it for free. Additionally, it encourages people to check out Amazon’s other service provisions, such as the video streaming service, which could generate even more revenue in the long run.
Thinking outside of the box
Amazon understands that shipping is a big battleground for retailers right now, which is why the merchant unveiled the Amazon Prime subscription service to begin with. At the same time, the organization realizes that offering free, two-day shipping can be a tremendous expense, even for a seller the size of Amazon.
Other retailers struggling to match customer expectations when it comes to shipping should consider Amazon’s approach, particularly if they offer subscription services for regular customers such as Prime. Sometimes it may be worth making the less expensive shipping option more valuable to customers.