Amazon (AMZN) Turns its Prime Focus to Students and Teens

Amazon.com, Inc. AMZN is bringing its Prime offerings for students and teens. The announcements were made over two consecutive days.

On Oct 10, the retail biggie launched Amazon Prime Student, a service that offers all benefits of regular Prime membership at half the price — $5.49 a month or $49 a year.

The service is exclusive to students in four and two-year colleges. Therefore, a valid .edu email address and the target graduation year are required to enroll for it. Amazon said that it will have special offers for Prime Students.

On Oct 11, Amazon launched another service that allows teens between 13 and 17 years to shop with their own logins but under parental guidance.

We observe that Amazon shares have gained 32.8% year to date, underperforming the 54% rally of the industry it belongs to.

Teens can send invitations to their parents through SMS or email or parents can opt for the service themselves. They can create up to four accounts with separate logins for their teens, select payment methods, shipping addresses and connect them to their primary account.

When a teen receives an invitation, he or she can create user name and password and start shopping through the Amazon App.

Each time teens place an order, their parents will receive a SMS or email showing the details. Teens can also include a note, say for example the reason for the order. Parents can give their consent by texting “Y”, or visiting the order page for more details before doing so. Parents can approve or disapprove orders.

They can also opt to skip the approval step and set pre-approved spending limits. They will also possess the power to cancel or return orders.

The service is not Prime exclusive but if parents are Prime members, the teens get select benefits at no additional cost. 

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Looking for New Markets

Owing to Amazon’s increasing penetration rate, there is always a chance of Prime saturation in the United States. To counter this, Amazon is raising Prime perks, such as the recent one, and introducing it to new demographics.

In June, Amazon launched a discounted monthly price for Prime members who receive government assistance. While the subscription usually costs $99 a year or $10.99 per month (for those who do not pay upfront), there is also a special price of $5.99 per month. The move is targeted at the lower income group.

In April, the company launched Amazon Cash to push Prime to underbanked and unbanked customers and those who are reluctant to use cards for online shopping fearing cyber theft. It is a service that enables customers to add cash to their Amazon.com accounts using a barcode generated from its website.