Amazon may need less of its clout than it did this past holiday season, according to data of purchase patterns.
That’s because people shopping this holiday season at Amazon.com are spending far less per purchase than they did last year, according to figures from Ben Jealous, head of the Center for American Progress.
Jealous calculates that it costs about four to seven dollars extra to get Amazon Prime now than it did last holiday season.
Members get free shipping, a lite version of Amazon’s $99-a-year Prime service, and a taste of e-books. But the revenue Amazon gets from Prime isn’t making it enough to compensate for that extra cost, Jealous says.
“It’s not a huge number,” Jealous, who served as governor of Maryland, said in an interview. But, he added, “if you have this big of a premium, it’s enough that it’s worth it to have that because it’s a ‘must have’ service.”
Jealous said companies with major retail clout, like Wal-Mart, could end up charging more for holiday shopping.
One big difference between holiday shopping online and at the mall is that most online purchases are paid for with a credit card. Those transactions are processed as cash register receipts, making the shopping bill look like it’s more expensive than it really is.
The extra costs can be enormous, says Jealous. Amazon CEO Jeff Bezos can change the price of a Kindle without calling a press conference or giving it away for free. But Amazon shoppers spend 4 to 7 times more on an average order than they would on the normal $49.99 package, Jealous said.
Companies should start letting consumers know what it costs them to process those higher costs, Jealous added.