Amazon offers incentives for Prime members to wait on deliveries

Discussion
Source: Amazon.com
Dec 09, 2016
Tom Ryan

Even with all its logistics might, Amazon.com apparently also needs help making all its shipping promises.

Earlier this year, the internet-giant quietly launched a program exclusively for Prime members called “FREE No-Rush Shipping.” The program basically provides credits for Prime members willing to wait a few more days beyond its guaranteed two-day delivery.

To participate, Prime members are asked choose “FREE No-Rush Shipping” at checkout to get their order within five business days. A promotional credit towards a future purchase is then automatically applied to their account once the order ships.

“You can use your FREE No-Rush credits towards purchasing a variety of things,” Amazon writes on the program’s landing page. “Credits can be used for buying eBooks on your wishlist, favorite movies on Amazon Instant Video, groceries and daily essentials on Prime Pantry and just about anything else we indicate in the offer at checkout.”

The promotional credit “applies only to the type of items indicated in the offer at checkout.” In addition to those mentioned above, it can include Digital Music, Amazon Appstore apps, Digital Video Games and Digital Software titles. Amazon writes, “This is just another perk of being a Prime member!”

Consumerist, however, panned the program, complaining of only being able to earn credit to purchase items supplied by Amazon (and not third-party Amazon Marketplace sellers) as well as the expiration date on the credits.

In particular, the article called out the vagueness and the lack of transparency around the types of credits being handed out. The site ordered three different items and received a credit $5.99 Prime Pantry credit each time. Consumerist’s Chris Morran wrote, “Amazon’s execution of the concept appears to be more of an attempt to upsell Amazon services than actually provide compensation to patient Prime subscribers.”

DISCUSSION QUESTIONS: Should offering credits for agreeing to an extended delivery time be a standard feature on e-commerce sites? Was Consumerist fair in criticizing the shortfalls in how Amazon’s credits are being allotted?

Braintrust
"It makes great sense for Amazon to reward patience of their most loyal customers when they choose to wait. "
"Amazon is offering a choice, not issuing a decree. They are adding an option, not taking away a privilege."
"The concept is like a relief valve for a stressed logistics network."

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13 Comments on "Amazon offers incentives for Prime members to wait on deliveries"

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Chris Petersen, PhD.
BrainTrust

The weakest link in Amazon’s growth is last-mile logistics. Based on Amazon’s growth, as well as that of other prominent e-commerce players, it is projected that services delivering to the consumer’s door would have to double in the next seven years. Perhaps this is good news for USPS, FedEx and UPS. It’s bad news for Prime customers who’ve grown to be dependent on two-day shipping.

So it makes great sense for Amazon to reward patience of their most loyal customers when they choose to wait. The question is whether the reward credits will be valued enough by a significant number of customers who will wait the five days to take the pressure off of a stressed delivery system.

Sterling Hawkins
BrainTrust

Amazon deals with peaks and troughs of consumer demand just like every other retailer. The difference is that they tend to be one of the best at gathering, understanding and using data to change customer behavior to be running in an optimal state. Amazon is continually trying out new incentives and this program doesn’t remove any existing perks of being a Prime member, but it does add one more lever to pull.

Let’s not forget that Amazon is continually innovating that last-mile of logistics as well. Talk of buying an airport, Prime Air cargo jets, drone delivery possibilities, etc. are all part of a more vertically integrated company vision that most other retailers don’t share. Other retailers need to compete on their strengths, not just follow the leader.

Lee Kent
BrainTrust

This just leaves me with questions. Since Prime shipping is free, is it worth it to Amazon to also give more away? And is delaying the free shipping saving them anything? I guess I’m just seeing more losses here and that is disturbing. I know Amazon can get away with a lot, but other retailers who try to compete with them — don’t. This move doesn’t seem to have the usual Amazon coolness about it.

But that’s just my 2 cents.

Ken Lonyai
BrainTrust

As described, the gray area around the incentives is especially weak for Amazon, which usually is very direct about things.

Overall, this is a big lesson for competitors trying to stay in step with everything Amazon does: if they are having trouble with their very sophisticated, proven and well-developed logistics system, overreaching may get others into serious trouble.

Steve Montgomery
BrainTrust

The principle reason consumers choose Prime is that they want their purchases now. Offering a discount that’s unknown until at checkout, with a limited life, will not entice many consumers to elect a longer delivery time. Amazon could increase the attractiveness of selecting delayed delivery by offering a flat $5 credit toward any Amazon product to the customer’s account.

Dan Frechtling
BrainTrust

Amazon is offering a choice, not issuing a decree. They are adding an option, not taking away a privilege.

If an insufficient number of shoppers take the option, Amazon tests higher incentives until they reach their target redemption. Revolving “no-rush shipping” offers of $1, $2 and $5.99 Prime Pantry credits have been around since at least 2014. I suspect they don’t pay much attention to Consumerist.

Ever heard a flight attendant announce your flight has been over-booked and offer travelers a credit to fly later? That’s what’s going on here. The credit rises until someone redeems. If the offer is too low for you, don’t take it.

Peter Charness
BrainTrust

I think it’s smart. Consumers want choice. If they are ordering something that can be planned ahead and save some money, why not? And I’m betting that when it comes time to spending those credits they will be used to impulse buy something with a higher cost anyways. Win and win.

Bob Amster
BrainTrust

The concept is like a relief valve for a stressed logistics network. Amazon probably realizes the stress that next-day shipping puts on the system and is using this offer to take some pressure off the process. What is interesting is that this is a step back towards when we didn’t have accelerated delivery. Everyone doesn’t need everything immediately.

Ben Ball
BrainTrust

Amazon recognizes the value of my time. That has been one of the keys to their success — especially with Prime. Now they are offering to “buy some back” from me, IF I choose to sell it. It’s my choice. As for the offers being limited to in-house products like Prime Music, well — that is just good business. Prime members have already demonstrated some appreciation for these services simply by paying up for their Prime membership. Or maybe this credit will incent trial of a service. I’m a member who uses this option at times and I don’t see anything here not to like. (Other than grousing that Amazon isn’t offering even more freedom in the choice. And if they need to they will.)

Kim Garretson
BrainTrust
7 months 13 days ago

I agree with Consumerist. I selected the option three times last month, promising $5.99 in credits for each. But there is no way I can see in the My Account info that these credits are there. And I have not yet purchased any of the Amazon options mentioned to see if the credits automatically apply. I’m not that concerned about Amazon-only purchases for the credits, but I would expect there to be a section in your account settings to keep track of these credits.

Phil Masiello
BrainTrust

Amazon is first and foremost a customer-centric company that is always looking for ways to understand the consumer and provide exceptional value. As a multi-million dollar seller on the marketplace, I have seen Amazon test, try and change many variables over the years.

People purchase a Prime membership for many reasons, the most prominent being free two-day shipping. Amazon has also set the standard of identity for all of e-commerce to strive for with its shipping performance. But I do not see Amazon pushing this service or requiring this change for purchases. They are offering another alternative.

I don’t believe this has anything to do with being overwhelmed with orders or trying to reduce capacity. I do believe this is another option for customers to get more value from Amazon Prime, while at the same time providing exposure to some other areas that Amazon feels are underdeveloped. Primarily the Pantry initiative, which has not penetrated to the extent they expected. If it works, it will stay. If not, it will go away and they will try something else.

Frank Poole
Guest
7 months 13 days ago

I prefer Jet’s model: offer an immediate incentive at the time of purchase for the items already in your cart. They’ve incentivized choices I hadn’t previously thought about, like “Opt out of free returns” and “Use debit card (not credit).”

As for Amazon, since members are waiving what’s normally regarded as the key benefit of Prime, why not allow that credit to be applied to next-year’s Prime renewal? A sort of “Pay-it-Forward” loyalty program.

Shep Hyken
BrainTrust

I love this concept. If you give the customer a choice between free rush delivery and free slower (just a little slower) deliver, they will pick “rush” every time … unless you give them a reason not to. Amazon is brilliant for offering the incentive. I’m sure it will pay off to reward patient customers willing to wait.

wpDiscuz
Braintrust
"It makes great sense for Amazon to reward patience of their most loyal customers when they choose to wait. "
"Amazon is offering a choice, not issuing a decree. They are adding an option, not taking away a privilege."
"The concept is like a relief valve for a stressed logistics network."

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