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Deep Dive: US Consumer Survey— Can Amazon Prime Lure Lower-Income Shoppers Away from Walmart?

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Coresight Research

Key Points

  • In June 2017, Amazon announced that it would offer a 45% discount for its Prime membership to all government assistance recipients, a move that aims to lure more lower-income consumers from retail competitors such as Walmart.
  • The discounted Prime membership could boost the penetration rate among this consumer group, which appears ready for e-commerce. In addition to Amazon’s competitive pricing, perks such as unlimited two-day free delivery would likely appeal to those consumers who may have reduced mobility (i.e., limited access to public transport, no car or no stores nearby).
  • However, Amazon still faces a number of challenges to capture these lower-income consumers. Survey data shows that this group is 47% more likely to shop at Walmart than the average American consumer. Furthermore, difficulties in terms of online payment (for example, lack of a credit card) remain a barrier for these consumers to shop regularly on Amazon.

 

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