Amazon Cuts Prime Fee for Low-Income Shoppers

Amazon.com is dropping its membership price for low-income shoppers, going after a stronghold on this demographic held by Wal-Mart. The online retailer giant said Tuesday that it will offer a nearly 20 percent segment of the U.S. population — people who obtain government assistance with cards typically used for food stamps — a $5.99 monthly Prime membership, less than the $10.99 a month or $99 annual plan for other consumers. The membership buys access to unlimited two-day shipping, video and music content, photo storage and other perks.

Total Retail's Take: This is the latest action taken in the ongoing battle between Amazon and Wal-Mart for retail supremacy. Low-income shoppers, who purchase in-store at a higher rate than other consumer segments, have long favored Wal-Mart over Amazon. Wal-Mart generated about $13 billion in sales last year from customers using the Supplemental Nutrition Assistance Program, or SNAP, accounting for around 18 percent of the money spent through the program nationwide. With the drop in price of Prime membership, Amazon is trying to gain a larger share of the low-income shopper market. The online retailer will require cards typically used for food stamps as an initial measure to determine participant eligibility.