Amazon for Everyone: Or The Beginning of the End for Walmart, Dollar Stores and Discounters Everywhere

Amazon just announced that they're offering nearly 50% off on their Prime subscription to people on government assistance. Prime is of course Amazon's model that provides members with free two day shipping on most items available through the e-commerce juggernaut. Everyone knows it's been tremendously successful at changing consumer behavior, getting people to start every buying activity at Amazon, and making Amazon their default option. It fits perfectly with Amazon's goal of removing all friction from the buying process.

But what's more important to note is that Prime has served as Amazon's Trojan horse, introducing subscribers to new offerings, from a Kindle library to video content to digital storage, extending and deepening the relationship consumers have with the company. Amazon has disrupted many industries with this model. First it was booksellers, then retailers in general, then hardware manufacturers (with the Kindle) and book publishers (with the Kindle), then retail technology (with Amazon Web Services), as well as music, video, storage.

While their influence has covered many industries and categories, most of their offerings have targeted consumers primarily seeking selection and convenience. Generally, their prices are good, not great, and they appeal mostly to middle class and above.

With this move to make Prime more affordable to lower income Americans though, Amazon may be attempting to expand its market to include the price conscious shopper. They also seem to be introducing more lower priced substitutes along side brand-name items, often offered by vendors in Asia or Eastern Europe, creating options that appeal to a wider range of consumers.

This may mean Walmart, Dollar Stores and other discounters are in for greater competitive challenges. Certainly they have some advantages--convenient locations in rural markets where a weekly visit might be entertainment as well as errand for customers for example. Price is another place where Walmart has historically been competitive. According to Recode Walmart wants to have the lowest price on 80% of all skus they carry, an ambitious goal. Amazon and Walmart in currently in a fierce battle to win this segment.

Amazon has scale, technology, and powerful relationships with product suppliers. In many cases, it's the manufacturers being asked to bear the brunt of Amazon's low price efforts. Amazon also has a history of being willing to spend to win new segments. And it appears that the value shopper may be the next frontier in the eCommerce wars. Building member-subscription relationships continues to be a core tactic.

Robbie Kellman Baxter is the founder of Peninsula Strategies LLC, author of The Membership Economy, and  and a LinkedIn Learning course author. Check out her courses: Create a Membership-Based Business and Develop a Service Orientation

Her clients have included large organizations like Netflix, SurveyMonkey, and the National Restaurant Association, as well as smaller venture-backed start-ups. Over the course of her career, Robbie has worked in or consulted with clients in more than 20 industries.

As a public speaker, Robbie has presented to thousands of people in corporations, associations, and universities. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business. Find Robbie on Twitter, @robbiebax.