Amazon and Walmart have been trading punches for the past few years, but Amazon might have just delivered a Muhammad Ali-style knockout blow.
The digital retail giant announced Tuesday a 45 percent discount on its popular Prime subscription service for low-income families receiving U.S. government aid. With this new pricing, Amazon is going right for the heart of Walmart’s consumer base: lower-income families.
The online marketplace says it will offer Prime, which includes 2-day shipping, video, movie and music streaming, cloud storage, and a bunch of other services, for just $6.00 a month. Customers can qualify to pay the lower price every 12 months, but only up to four times.
The subscription is available to everyone else for $11 a month, or $100 a year.
The move could turn out to have a huge impact on Walmart’s bottom line. The richest company in the world is the biggest beneficiary of SNAP (formerly the Food Stamp Program)—the Supplemental Nutrition Assistant Program—which provides financial assistance to low- and no-income families to purchase food. One in five Walmart customers pays with SNAP assistance, according to Reuters.
Amazon says the discount can only be used by those who pay with Electric Benefit Transfer cards. It will start looking for other ways to quality for the program for those who do not use EBT.
This is just the latest in a string of moves by Amazon to steal some of its biggest rival’s customers. Don’t be surprised if Walmart responds in the next few months.
H/T Recode