Amazon UK raises the minimum order value for non-Prime free shipping
April 29, 2015 06:03 PM
Amazon.com Inc.’s customers in the United Kingdom on Wednesday were starting to pay more for certain e-commerce deliveries, part of a change likely designed to encourage more of those online shoppers to sign up for the e-retailer’s Prime program.
The top merchant in Internet Retailer’s Europe 500 guide doubled the minimum order threshold for its Free Super Saver Delivery program to 20 pounds (US$30.86) from 10 pounds (US$1543). Amazon representatives did not respond to requests for confirmation, but at least one U.K e-commerce publication reported the change, which was apparent Wednesday afternoon on Amazon.co.uk.
In October 2013, Amazon, which is also No. 1 in the newly released Internet Retailer 2015 Top 500 Guide, a ranking of North American retailers by their online sales, made a similar change in the U.S. It announced that shoppers who want free shipping through its Free Super Saver Shipping Program will have to spend $35 per order, up 40% from $25, to receive free shipping.
Amazon never admitted as much, but Amazon observers viewed the move as a stab at nudging more consumers to sign up for the e-retailer’s Prime two-day-shipping-and-loyalty program. For $99 per year in the United States, and 79 pounds (US$12190) per year in the United Kingdom—or a free trial membership—consumers receive two-day shipping on Prime-eligible products plus access to streamed music, TV and films, among other benefits. A Millward Brown Digital report from earlier this month strongly suggests why Amazon wants more consumers to join Prime: The research firm finds 63% of shoppers at Amazon.com who belong to Prime convert during their shopping sessions. The research firm says that’s nearly five times the conversion rate of non-Prime members. It’s also far higher than the typical 3-4% conversion rate of U.S. e-retail sites in general. (The report focused on the United States, not the United Kingdom.)
Data accessed via Internet Retailer’s Top500Guide.com shows that Amazon’s general conversion rate stands at 4%.
An estimate earlier this year from investment firm Macquarie says half of U.S. households could be members of Amazon Prime by 2020. Macquarie estimates 20-25% of U.S. households, or 40 million, include a Prime member.
Meanwhile, ChannelAdvisor Corp., which helps merchants sell on Amazon and other marketplaces, estimates that 5 million to 7 million consumers in the U.K. belong to Prime.