Amazon cuts the price of its Prime subscription service for shoppers who receive U.S. government aid, taking aim at rival Wal-Mart. Fred Katayama reports.
Amazon is throwing another punch at Wal-Mart. It cut in half the price of its Prime subscription service for people on welfare and food stamps, Wal-Mart's key customer base. For $5.99 per month, they now get fast shipping and streaming of movies and TV shows. Max Wolff, market strategist at 55 Capital, says Amazon also wants to sell more groceries and drugs. (SOUNDBITE) MAX WOLFF, MARKET STRATEGIST, 55 CAPITAL (ENGLISH) SAYING: "They want to distribute into various subsidized households because that's an area they haven't penetrated. And what Amazon has learned very carefully, is that people who are in Prime, order a lot more than people who are not." Upping the ante against Wal-Mart, Amazon cut the threshold for free shipping on all orders to $25 from $35 in May. Wal-Mart started its own membership program called ShippingPass last year. It offered free two-day shipping for $49 a year. But the company ended the program in January, replacing it with free two-day shipping on orders of $35 or more.