ShopRunner: Amazon Prime fee hike will 'drive' away customers
The competitor promotes its own $79 membership while saying Amazon is spending too much on its fight with Netflix.
Amazon rival ShopRunner is hoping to lure away Amazon Prime members by throwing a few barbs at the Internet retail giant and offering its own subscription service for free.
Following Amazon's announcement of a fee increase for Prime on Thursday, ShopRunner, which offers a two-day free shipping membership for various retail brands for $79 a year, took the opportunity to promote its service, while basically saying that Amazon is wasting money on its video-streaming service.
ShopRunner is offering a one-year free trial that specifically targets Prime users. The site's brands include Neiman Marcus, Brooks Brothers, PetSmart, and Blue Nile. According to a ShopRunner spokesperson, the site guarantees that it will never charge more than $79 for the membership after the free-trial and adds that membership doesn't come with "the bloated costs of video content."
Amazon said previously that the increased Prime price was due to an increase in transportation costs. Fiona Dias, ShopRunner's chief strategy officer, said the 25 percent increase in the fee is not due to rising fuel costs, it's because Amazon is trying to take on Netflix, which has a hold on the majority of the video-streaming market.
"No one buys Amazon Prime for the awesome video content. Raising the price 25 percent for a service that consumers don't care about will only drive away customers," Dias said in a statement. "Trying to take on Netflix is expensive...Amazon still has a long way to go."
Amazon spokeswoman Julie Law declined to comment on ShopRunner's efforts.
"We are laser focused on working every day to provide customers with the best prices, widest selection, and greatest convenience on Earth," she said. "We are not focused on other companies."
Amazon hasn't raised its fee since it started the subscription program nine years ago. Since then it's grown its product selection and added content services like video streaming and e-book lending. Amazon intends to keep adding content.
Meanwhile, ShopRunner wants to compete with Amazon solely on shipping, the main draw of Prime. But, it's not the only one. Newegg, which is also a brand available on ShopRunner's service, announced its own fast shipping subscription service shortly after Amazon hinted at a Prime price hike.