Target Might Spin Up Its Own Version of Amazon Prime
The retailing giant could launch its own subscription shopping service to keep up with rivals Amazon and Walmart.
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Just as Amazon Prime finds its groove again, a new competitor might be about to crash its party.
Bloomberg reported Wednesday that Target is considering launching an Amazon Prime-esque subscription service, a step above Target’s current free loyalty program. This comes just as demand for Amazon Prime is showing signs of rebounding after slowing to a crawl in 2022.
If We Can Hit That Bullseye…
Target’s sales had a slightly rough 2023. An inflation-riddled economy meant shoppers spent less on big-ticket discretionary items, and a backlash against a line of Pride-related products affected “traffic and top-line trends,” CFO Michael Fiddelke told analysts on an earnings call. Sources told Bloomberg that Target’s potential launch of a subscription service, nicknamed Project Trident, is designed to boost sales amid competition with both Amazon and Walmart, which has its own subscription service that sounds like a streaming service: Walmart+.
Amazon Prime is both a retail subscription and a video-streaming service, and in a piece of synchronized price-layering with many other streamers, Amazon announced at the end of last year that it would introduce an ad-supported version of Prime Video and customers would have to pay an extra $2.99 a month for an ad-free version. While some users may find ads on Amazon to be the last straw before navigating through endless “Are you sure you want to cancel your subscription?” prompts, data provided to Business Insider by CIRP suggests Prime is in a stronger position now than it was last year:
- In 2022, Prime saw its first-ever drop in US subscriber numbers to 168 million. But by the end of 2023, Prime membership sprang back to 176 million.
- Perhaps more importantly, 2023 saw the highest-ever penetration of Prime, i.e., the percentage of Amazon shoppers who also shell out for Prime membership. According to CIRP’s data, 74% of people who shop on Amazon are now also Prime members, up from 66% two years ago.
Ill Health: While Prime is showing signs of a consumer renaissance, Amazon is still on a major cost-cutting mission. This week, the e-commerce giant’s cuts extended to its health care division. While Amazon has had ambitious plans in the healthcare space, it has struggled to get a proper foothold. You know what they say: an apple a day keeps Andy Jassy’s relentless job-scythe away.