Prime Without Borders
Mike Feibus
President and Principal Analyst, FeibusTech. Also Columnist at USA Today Tech, MarketWatch, CIO Magazine
Amazon's just-announced Buy with Prime service soon will extend Prime shipping benefits beyond the company’s walls to non-Amazon websites. More important, perhaps, than the value to Prime subscribers are the implications for the $140 billion US courier market – as well as for myriad other players in the half-trillion-dollar domestic ecommerce business – should the offering take off.
For subscribers, the Buy with Prime button will bring Prime’s hassle-free purchasing, free delivery and free returns to other sites besides amazon.com.
Toward that end, the internet juggernaut will start rolling out Buy with Prime this year with select Fulfillment by Amazon sellers. Eventually, the company plans to offer Buy with Prime to all sellers - and even to companies not affiliated with Fulfillment by Amazon. Which means that over time, Prime subscribers can expect to see Buy with Prime buttons on more and more non-amazon.com sites.
Naturally, the more Amazon fans out the new service, the larger the benefit will become for Prime subscribers. And the wider the service proliferates, the more competitive couriers and e-commerce vendors will feel pressure to respond.
?That will be easier said than done.
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?White-glove fulfillment
A more subtle outgrowth of Buy with Prime is that Amazon is effectively laying out a new, three-pronged definition for white-glove fulfillment: free shipping, fast, easy payment and free returns.
?Of course, competitors have responded to Amazon’s logistical enhancements before. Many, for example, added a free shipping option in the years following the Amazon Prime launch in 2005. And PayPal, Shopify and others already have helped make fast, easy payments commonplace inside and out of the Amazon sphere.
?But the third prong – free returns – could prove to be most disruptive for others. Indeed, it’s taken Amazon itself nearly four years to grow comfortable enough managing all the logistical backwash the feature invariably creates. And Amazon had the advantage of figuring it out while controlling all three pieces of the puzzle: ecommerce, delivery and fulfillment.
Competitors will need to begin developing a response now – well before the new service has a chance to flourish. Because just as Prime subscribers came to expect free shipping over the past decade, so are they now developing a taste for free returns on soundbars, leggings, detergents and other items.
?But it will be much harder for competitive sites to adopt free returns, because boomerang buys complicate the entire web of logistics. Which means that competitive ecommerce, fintech, courier and fulfillment providers will need to partner and/or merge to tackle the problem.
Chief Marketing Officer | Product MVP Expert | Cyber Security Enthusiast | @ GITEX DUBAI in October
2 å¹´Mike, thanks for sharing!
Contributing Editor/Power at Electronic Design Magazine
2 å¹´Will they also export the labor abuse and the union busting tactics that are essential parts of the company's current business model?
Deep Tech PR Expert focused on the Semiconductor Industry
2 å¹´Yes, the logistics of handling returned items will be a huge problem for the non- Amazon sellers engaged in the Prime program. But it could be a benefit for budget-conscious buyers. Here in Santa Rosa, stores are popping up that sell returned merchandise at a deep discount. And, I am sure this is not the only example of an emerging returns industry. You will probably be among the first to clearly explain it to us.