Amazon (NASDAQ:AMZN) continues to enhance its e-commerce offerings through the Prime program, introducing a new grocery subscription service at $9.99 per month for Prime members. The service is currently in the pilot stage, being tested in Denver, CO; Sacramento, CA; and Columbus, OH.
Under this new plan, Prime members gain unlimited grocery deliveries from Whole Foods and Amazon Fresh for orders exceeding $35. Additionally, they enjoy unlimited 30-minute pickup for orders of any size, eliminating the need for existing fees such as $6.95 for Fresh orders between $50 and $100 and $9.95 for orders less than $50.
This move is expected to attract more subscribers to the service, potentially increasing Prime membership adoption. The initiative aims to strengthen Amazon’s grocery retail business and drive sales growth, particularly during the holiday season.
The impact is likely to extend to Amazon’s physical store and online store sales, which recorded $4.9 billion and $57.3 billion in the third quarter of 2023, marking 6% and 7% YoY growth, respectively.
For 2023, projections suggest $20.8 billion in physical store sales, reflecting a 9.6% increase from 2022, while online store sales are estimated at $228.3 billion, indicating a 4% growth from the previous year.
Amazon Prime remains a key driver for top-line growth, supported by customer-friendly offerings and cashback benefits. The subscription service sales grew by 14% in the third quarter of 2023, reaching $10.2 billion. The model anticipates subscription sales of $41.3 billion for 2023, representing a 17.4% growth from 2022.
The continuous growth in subscription services is expected to contribute to Amazon’s overall top-line growth, with a model estimate of $569.46 billion for net sales in 2023, marking a 10.8% increase from 2022.
Amazon’s robust financial performance has boosted investor confidence, with the stock gaining 64.3% year-to-date, outperforming the industry’s growth of 42.8%. The company’s strategic focus on Prime and its expanding array of benefits positions it well for sustained success.
Featured Image: Unsplash @ Christian Wiediger
Author Stephanie Bédard-Châteauneuf 
