One of the main things Amazon is known for - and prides itself on - is great prices and free delivery. Since it started offering a free delivery option, which it calls Super Saver Delivery, Amazon has required a minimum spend of £10. However, as of last week it announced that it would be doubling its minimum spend for free delivery, requiring customers to spend £20 before they can choose the Super Saver shipping option. For books, however, the minimum spend remains at £10. So why have Amazon done this?
Many people are suggesting that the reasoning behind this decision is twofold. First, Amazon hope that by upping the minimum spend, its customers will add more to their baskets in order to qualify for the free delivery option. The second reason is that the company is hoping that this decision will drive more of its customers towards Amazon Prime. Amazon Prime, which costs £79 per year, gives customers free one day delivery on all products, and gives them access to a vast film and television library that can be streamed for free. For Amazon, this makes perfect sense - studies show that Prime members spend twice as much as ordinary customers, so as to fully make use of their membership.
So what does this mean for the e-commerce industry and delivery fulfilment more generally? Not afraid to predict the worst, many logistics and fulfilment companies have suggested that this rise in minimum spend may be announcing the start of the end for free delivery. However, recent surveys carried out in the UK and across the world have found that for many customers, free delivery is one of the main reasons they will choose to buy with a specific website or brand. What this could mean, then, is that Amazon is now so confident in its hold over customers and the e-commerce market more generally that it believes that even with a higher minimum spend for free delivery, it can still keep hold of its large customer base. How it pans out for the e-commerce giant in the future and how it effects the minimum spend of other e-commerce websites, we can only wait and see.