2017/01/19

Amazon Takes Aim At Costco With New Prime Visa Card

Amazon
Amazon
Amazon has a new credit card that promises big rewards and takes aim at Costco’s loyal customer base . The Prime Rewards Visa Card is much more than a store card and promises cash back on all purchases, to varying degrees.

The card is free to Prime members (who pay a $99 annual fee) and rewards users with a whopping 5% cash back on all purchases made at Amazon and 2% in Amazon credit for purchases at restaurants and gas stations. Users get 1% cash back for purchases everywhere else. (See the full list of benefits here.)

Amazon previously offered two different charge cards: The Prime Store Card, good only at Amazon.com, and the Amazon Rewards Visa that gave 3% back in cash for purchases.
The new benefits put Amazon’s card right up there with the popular Chase Sapphire card. Making it one of the best in the market for benefits.

For Amazon though, it helps across a number of different metrics.

“We are adding even more value to Prime by offering rewards on Amazon and everywhere else you shop,” Amazon VP Max Bardon said in a statement.

Luring more shoppers into its Prime membership program and keeping them there with benefits and features is a huge priority for Amazon.

The company doesn’t report how many Prime members it has, saying only it’s in the “tens of millions.” One independent group estimates that half of all U.S. households are subscribed to Prime.

Those members are also among the most affluent in the U.S., according to Greg Buzek, founder and president of IHL Group. Roughly 70% of U.S. households with a household income of $112,000 or higher have an Amazon Prime account.

These shoppers spend more money and time on Amazon. Nearly half of all consumers now bypass Google and go directly to Amazon for product searches and reviews. Each new Prime benefit is directed to further cement Amazon’s lock on this customer.

Other store-branded credit cards offer cash back like Target’s REDcard, where points are rewarded only on purchases at that store. Nordstrom has a branded Visa card good anywhere that allows users to earn loyalty points on all purchases and multiple points at Nordstrom banners.
Costco though, has one of the best cards around and some of the most loyal customers to go with it.
The warehouse club switched from a long-standing exclusive with American Express to Visa this year and the new Visa Anywhere Card offers cash back at varying levels on in-store purchases, gas, restaurant and travel. All other purchases deliver 1% cash back to the user.

Amazon’s new card will appeal to this same customer. Delivering customer value to grow loyalty over profits has been Amazon’s strategy since the beginning. This card furthers these efforts.


Costco’s website often seems like an afterthought. In truth, offering free shipping on bulk items and big-ticket buys (the only things Costco sells) can be quite costly. In-store sampling, seasonal displays and exclusive merchandise increase impulse buys and draw enthusiastic members into the brick and mortar space more frequently.

That’s a difficult experience to replicate online and thus far, Costco hasn’t really tried. That might have to change.

Follow me on Twitter @lfheller
Publicar un comentario