The company has curtailed its benefits for its “Amazon Moms” program, and it did so in a less than upfront way, sparking an emotional uproar from parents who had grown to rely on the service’s steep discounts.
Taking a page out of the great Netflix freak out of ’11, thousands of moms are trying to scream loud enough via the Web to force Amazon to reverse its stance. There’s a very emotional petition here, with 1600 signatures.
From the petition:
“Starting on January 24, 2012 the maximum discount available for Amazon Mom members will be 20% (5% for subscribe & save and 15% for Amazon Mom). In addition to that, all members will have to sign up for Amazon Prime at $79/year in order to even receive the 20% off.
Times are very rough, unemployment is high, money is getting harder and harder to come by. This discount is the only way some people can afford to buy the necessities they need for their children, I know it certainly helped my budget. Not to mention all the moms out there without easy access to transportation, or who may be handicapped, who used this program to have necessities delivered right to their door. It was a great program until all the “changes” were rolled out.
First members were offered 30% off total, free Prime membership for a year, and other various perks such as getting to rent a Kindle book per month for free. Then the program was changed to 20% off total, and if you had to change the size of a diaper, you lost your grandfathered discount. Finally, the program as it was seems to be ending completely. New members are blocked from joining, and once your free trial expires, you must pay $79/year to use Amazon Mom while still only getting a 20% discount. Now users are reporting that Amazon has blocked them from ordering extra shipments of diapers now so that they won’t run out before the free program ends. That is extremely dishonest.
Considering that Amazon.com had a profit of over 15 billion dollars last year, misleading customers, alienating them, and then refusing to honor their program is not a very warranted or smart practice.
If one woman can start a petition and get Bank of America to remove it’s fees, or Verizon to remove it’s billing fee, then imagine what we can do if we ask Amazon.com CEO Jeff Bezos to remove the charge for Amazon Mom and give us back the original discount. Please help me tell Jeff that what his company is doing is wrong, and we aren’t going to support it!”
It won’t work this time, and it shouldn’t.
Even as a new mom who sympathizes on nearly every mom issue I just can’t get worked up about this one. Amazon offered the program as a way to get moms to switch their buying patterns, and as now that a lot of them have, they are scaling it back. That’s not a huge surprise: Prime coincided with torrid sales growth from $34 billion to $48 billion in one year, but profitability decreased by 45% in 2011. It doesn’t really matter that Amazon had $15 billion in profits last year. The company is under no obligation to gift that to shoppers.
Amazon clearly fumbled how they communicated this, but putting that aside, isn’t this just how retail businesses operate? This was the late 1990s ecommerce playbook: Offer financially untenable deals to get adoption, and then adjust to a model that is more economically viable. That strategy is the basic underpinning behind daily deals sites too. And, for that matter, people who give out samples outside of Mrs. Fields or drug dealers. Get people hooked with the freebies and then charge. Customer acquisition 101.
Besides, Amazon’s value add isn’t really discounts, although the site routinely offers the best prices on many things. I shop at Amazon because of the breath, single-click check out and free delivery via Prime. The differentiator for Amazon is really convenience, and if I were a shareholder, I’d rather they focus on earning customers through convenience than cost-cuts.
There are two kinds of reactions I’ve seen to the mom issue. The first is the person who says they’re going to switch to Target or Wal-Mart now that the bargain is off. Those are the customers that Amazon will lose. And competitors are making hay trying to attract them.
Amazon Prime competitor ShopRunner is offering a new program to capitalize on the anger. Starting today, it’s giving moms a free 15-month membership as long as the customer spends $50 in the first three months of being a member. Participating retailers in the ShopRunner network include ones that totally make sense like ToysRUs, BabiesRUs, and drugstore.com, and ones that are less core to the job of being a mom like American Eagle Outfitters, PetSmart, and Sports Authority. No doubt, Amazon was expecting this.
But the second type of customers signing the petitions are the wackos. One person was arguing she wouldn’t be able to afford diapers for her kids any more. I understand we’re in a time of economic uncertainty, but if things are that bad, it’s not really Amazon’s job to fix it. This isn’t a social services organization, this is a for-profit company. And if you considered Amazon Moms in your economic decision to have a child, that’s part of a larger problem. I also saw someone demanding that Amazon not only restore the service but issue “reparations.” That’s a loaded word. There’s a big difference between paying full price for diapers and slavery.
I’m sure Amazon assumed they’d lose some customers in the first category; the ones who were only in the program for the discounts. Likewise, no one offering a Groupon expects all customers to come back once they have to pay full price. No customers acquisition strategy works 100% of the time.
As for the wackos, Amazon has a history of not caving– even when it’s arguably the legitimate thing to do. I hope Amazon doesn’t cave this time, not because I hate moms, but because people are already citing the precedent set by the Netflix cave. At some point, companies will stop giving people discounts if they feel like there will be too big of a backlash if ever they have to rescind it for legitimate business reasons
Here’s a radical idea: Shouldn’t all those people on the petition saying this was a “financial life-saver” for their family just feel a little grateful it ever existed? Maybe a “thank you” for offering it to begin with and not rescinding it completely?
What’s worse: Having lost your diaper discount or never having one in the first place?