Amazon.com Inc. is making it easier for college students to pick up their online orders fast—in as little as two minutes in some cases—and that, some say, could lead to more of those students signing up for a Prime membership.
Amazon, No. 1 in the Internet Retailer 2017 Top 500, just unveiled a new service called Instant Pickup, which allows shoppers to place orders of select goods such as food and electronics through Amazon’s mobile app and then pick them up from one of Amazon’s staffed pickup locations. It’s free for Prime and Prime Student members to use. An Amazon spokeswoman says the service is only available to Prime members, and there is no option for non-Prime members to use it.
“As shopping behaviors continue to evolve, customers consistently tell us that they want items even faster,” said Amazon director of student programs Ripley MacDonald. “Whether it’s a snack on-the-go, replacing a lost phone charger in the middle of a hectic day or adding Alexa to your life with an Echo, Instant Pickup saves Prime members time.”
The Instant Pickup service currently is available at Amazon’s pickup locations at University of California-Berkeley and University of California-Los Angeles campuses and will soon be available at Georgia Tech, Ohio State University and the University of Maryland.
Amazon has a 22 staffed pickup locations on or near college campuses across the country. All Amazon customers can ship their orders to a pickup location.
The fast pickup offering could drive a surge in college students signing up for Prime memberships. Prime is Amazon’s loyalty program which costs $99 per year or $10.99 per month and offers perks such as free expedited shipping and streaming video. Students receive a a six-month free trial of Prime and then pay half price.
“Amazon has a huge chance to recruit a new generation of brand-loyal customers to its lucrative Prime program,” says Tom Caporaso, CEO of e-commerce platform provider Clarus Commerce. “Using college campuses as a testing ground, and selling smaller, impulse-buy goods, is a safe and potentially lucrative move for Amazon, as college students, on average, spend 40% of their income on discretionary spending, which includes snacks, drinks, food, books and ‘non-essentials.’”
“The strategy is simple: Get students hooked, and they’ll be customers for life,” adds Gil Don, CEO of payment technology vendor Splitit. “With Instant Pickup, Amazon can use its campus locations and incentives to bring in new customers and promote its Prime loyalty program to students.”
Financial services firm Cowen & Co. estimated earlier this month that 59% of 18-24-year-olds in the U.S. live in a household that has an Amazon Prime membership. Cowen based its figures on a survey of 2,500 U.S. shoppers in July. Overall, Cowen estimates that 49.9% of U.S. households have a Prime membership.
Amazon wants to recruit more Prime members because those shoppers spend more than non-Prime members. Data from Consumer Intelligence Research Partners (CIRP) estimates that Prime members spend $1300 per year on Amazon on average compared with $700 for non-Prime members.