clock menu more-arrow no yes

Amazon Begins Extending Prime-Member Perks to Other Shopping Sites

"Prime could be the VIP pass to the Internet.”

NoDerog / iStock

Can Amazon Prime become the VIP pass for the rest of the web?

For the first time since launching its Prime membership program in 2005, Amazon is extending some of the club’s perks to its members as they shop on other big shopping sites around the Web. But mistrust among other online retailers could prove a big hurdle for Amazon’s plans to make Prime more valuable outside of its own websites.

Amazon announced its first such deal Tuesday with the mid-size British fashion retailer AllSaints, which has started offering Amazon Prime members free, next-day shipping on purchases they make on AllSaints.com.

The deal comes with a few moving parts. First, AllSaints has started to advertise its products in search results on Amazon.com — something that many fashion retail brands have so far been reluctant to do. Amazon customers who want to buy AllSaints apparel found on the giant marketplace will have to click through to AllSaints.com, log in with their Amazon usernames and passwords and use the payment methods they have stored with Amazon to qualify for the free shipping deal. Amazon charges AllSaints a small fee each time one of its customers clicks through from Amazon.com to AllSaints.com, but does not take a cut of the sale. In that way, it’s closer to an advertising deal.

The move underscores the growing importance inside Amazon of the Prime program, the $99 annual membership that gives members two-day shipping on a wide range of products and access to a large library of TV shows, movies and songs that can be streamed online. And it’s clear why: Prime members spend double the amount that non-Prime members do on Amazon in a year, according to research studies conducted by various industry analysts.

As a result, Amazon is looking to add more perks to the program to attract more members, which may number as many as 50 million worldwide, according to one prominent analyst’s estimate. On Tuesday, Amazon announced that Prime members will receive free, unlimited photo storage going forward.

The pact with AllSaints also highlights Amazon’s ambition to grab a bigger piece of the giant apparel industry, which totaled $174 billion in sales to U.S. adults in 2013, according to research firm NPD. But Amazon is facing an uphill battle as it tries to court higher-end retailers — with their healthy profit margins and high average order size — to advertise or sell their products on Amazon’s marketplace.

Over the past year, Amazon has failed to convince other retailers to sign on for this retail program, known internally as Prime Pass, according to industry sources. Abercrombie & Fitch and Neiman Marcus are among the retailers that have declined to advertise their products on Amazon or offer shipping perks to Prime customers on their sites, these sources said. Both companies are instead working with ShopRunner, an Amazon competitor that sells a $79 annual membership that gives its customers free, two-day shipping on orders placed on a wide range of partnering e-commerce sites.

The list of fears retailers have about doing business with Amazon is long. At the top is the worry of diluting their brand image by advertising their products on Amazon’s marketplace, which is still best known as a place to buy items such as consumer electronics, tools and toys, not $1,000 leather jackets.

“When we go to open a store in the mall, we’re very careful about who is around us,” one high-ranking retail executive told Re/code recently. “On Amazon, because they are serving up customized results, our stuff may appear next to some Joe Schmo or third party selling similar goods at half the price.”

Retailers said they were reluctant to give Amazon a view into which of their products were most popular among Amazon shoppers. Some of these fears stretch to the border of paranoia. Several competitors told me they are convinced that Amazon may one day cut its own deals with clothing manufacturers to sell apparel under its own brand names that compete directly with its own retail partners.

“The more information they have, the more deadly they get as a competitor,” another retail executive said in a recent interview.

I ran these concerns by Amazon VP of Seller Services Tom Taylor and AllSaints global digital chief Rich Ascott in an interview Monday during an industry conference called Money2020.

When customers log in using their Amazon account information on AllSaints or other sites, Amazon provides the retailer only the customer’s name and e-mail address so it keeps track of the customer, Taylor said. He also maintained that Amazon only sees the purchase total, and not the items ordered, when someone completes a sale using their Amazon payment information on another site.

Ascott, for his part, understands the fears, but believes many are misguided. To maintain its brand image, AllSaints will have a storefront on Amazon.com that more closely resembles its own site than other Amazon pages. AllSaints also will only ever sell from its own storefront, so shoppers shouldn’t expect to be able to buy a pair of AllSaints boots directly on Amazon.com.

The AllSaints exec also believes strong fashion brands should have little to fear going head to head with Amazon if it chose to sell its own line of clothing. Some might call that confidence, others naïveté.

The AllSaints brand, “is precious enough that you wouldn’t want to give it away and let Amazon put it in its own brown boxes,” Ascott said. “But it’s robust enough that it could stand up to the worry that these guys might one day use the data to build a competitor to AllSaints.”

AllSaints is handling all of the packaging and shipping itself. Ascott said the retailer decided to offer Prime customers next-day shipping instead of the normal two-day window that Amazon promises because it wanted the partnership to stand out. AllSaints is also considering giving Prime customers a first look at new products and may eventually offer some clothing exclusively to this group of shoppers.

“Prime could be the VIP pass to the Internet,” Ascott said.

Amazon customers complete purchases after placing items in their shopping cart at a rate that’s 34 percent better than non-Amazon customers, according to AllSaints. The Amazon payments integration has also reduced checkout time by more than a minute on AllSaints.com and boosted sales. That’s one reason why Amazon said it will guarantee that its payments button will help increase a site’s sales within 30 days or it will reimburse the partnering site for the fees Amazon collected on up to $100,000 in transactions.

“I’m drinking the Kool-Aid,” Ascott said. “But the stats back it up.”

This article originally appeared on Recode.net.