Some interesting news for Amazon Prime subscribers: Amazon has begun offering the benefits of its $99 Amazon Prime membership beyond its own shopping site. According to Re/code, Amazon has partnered with British retailer AllSaints to give free same-day shipping to Prime customers who make purchases on AllSaints.com. Re/code's Jason Del Rey reports that the deal will function something like an advertising agreement:
First, AllSaints has started to advertise its products in search results on Amazon.com—something that many fashion retail brands have so far been reluctant to do. Amazon customers who want to buy AllSaints apparel found on the giant marketplace will have to click through to AllSaints.com, log in with their Amazon usernames and passwords and use the payment methods they have stored with Amazon to qualify for the free shipping deal. Amazon charges AllSaints a small fee each time one of its customers clicks through from Amazon.com to AllSaints.com, but does not take a cut of the sale.
There are lots of intriguing parts of this arrangement, not least the detail about AllSaints advertising its merchandise in Amazon's search results. Just last month, Google Chairman Eric Schmidt commented that his company's biggest competitor in search was not Bing or Yahoo, but Amazon. The more products Amazon can drive to its search results through partnerships with retailers like AllSaints, the more competitive it becomes with Google and other big search engines.
What does AllSaints get out of this, other than more satisfied customers? For starters, more reliable customers. AllSaints says Amazon shoppers are 34 percent more likely to complete purchases after adding items to their shopping carts than non-Amazon shoppers. Prime members in particular are widely thought to spend twice as much on Amazon in a year than non-Prime members. By extending Prime benefits to shoppers on its own site, AllSaints is likely hoping those statistics will rub off.
And other than search, what's in it for Amazon? Re/code suggests that partnering with retailers—especially high-end ones—could help Amazon grow its slice of the $174 billion U.S. apparel industry. Of course, the flip side of this is that Amazon has reportedly run into trouble getting retailers like Neiman Marcus and Abercrombie & Fitch to team up because they fear diluting their well-cultivated images.
But most importantly for Amazon, if Prime catches on with other retailers, the membership might begin to be seen not just as a must-have for Amazon, but a must-have for any sort of online shopping—a "VIP pass to the Internet," as AllSaints' Rich Ascott termed it. As competition for selling and delivering goods online ramps up—thanks to Alibaba and Google and plenty of others—Amazon is betting that that kind of VIP pass is invaluable.