For the first time since its launch in 2005, Amazon has upped the ante for Prime members with all new perks. Unfortunately, not everyone is on board. With a new feature known internally as “Prime Pass,” Amazon Prime members can now shop from selected online retailers outside of Amazon and checkout with free, next day shipping.
The first store to extend Prime Pass benefits to its customers is AllSaints, a mid-sized British fashion retailer. Here’s how it works:
- Amazon shoppers who stumble upon AllSaints apparel on the marketplace will click to the AllSaints site.
- Shoppers will be prompted to login with their Amazon Prime username and password.
- Then, they’ll check out with a payment method stored in Amazon.
For each click from Amazon to the AllSaints webpage, Amazon charges the retailer a small fee. Sound fair? AllSaints global digital chief Rich Ascott isn’t worried about it. “Prime could be the VIP pass to the Internet,” he says. So far, Amazon customers who venture to the AllSaints site complete purchases after placing items in their shopping cart at a rate that’s 34 percent better than non-Amazon customers (RECODE). And even though AllSaints now has to advertise products on the Amazon marketplace, they operate under their own storefront, meaning shoppers could not expect to buy AllSaints apparel directly from the marketplace. Other retailers, however, aren’t quite as eager to hand out free passes.
When Amazon solicited the attention of high-end retailers to partner for Prime Pass, they found that many were unwilling to open their virtual doors. Higher-end retailers, like Neiman Marcus, express fear at the idea of having to advertise their merchandise on Amazon.com. The biggest fear for these retailers is that advertising their products on Amazon will dilute their brand image. One high-ranking retail executive shared the following in an interview with Re/Code, a leading tech and commerce publication:
“When we go to open a store in the mall, we’re very careful about who is around us. On Amazon, because they are serving up customized results, our stuff may appear next to some Joe Schmo or third party selling similar goods at half the price.”
Additionally, they’re reluctant to give Amazon a view into their confidential product reporting, like which items are most popular among Amazon shoppers. Though, as Re/Code writer Jason Del Ray suggested, the basis of this fear may stretch to paranoia. Several retailers shared with them that “they are convinced that Amazon may one day cut its own deals with clothing manufacturers to sell apparel under its own brand names that compete directly with its own retail partners.” One retail executive even shared with him that “The more information they have, the more deadly they get as a competitor.”
However, many of these retailers have signed up with ShopRunner, an Amazon competitor that, for a $79 annual membership offers free, two-day shipping. Some of the brands partnering with ShopRunner are Prada, Apple, LG, Michael Khors and Chanel. Why ShopRunner and not Amazon? For starters, ShopRunner is an online membership program only – they don’t manufacture or sell items under their own name. The paranoia around Amazon becoming a competitor to Neiman Marcus and Abercrombie and Fitch may sound baseless to some, but for these retailers, it’s enough to close the doors on Prime Pass, for now anyway.
If the door was opened to you, would you sign up for Prime Pass? Or are you more of an independent DIY-er when it comes to creating marketing opportunities? Let us know what you think in the comments.