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Amazon May Increase Prime Membership Price by $20 to $40

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Amazon Prime Price Increase

Amazon may be raising their Prime membership price as the retailer is battling higher shipping costs.

Fuel prices have climbed and the company is struggling to keep the cost of deliveries down.

During a conference call with analysts on Thursday, following disappointing quarterly results, Amazon said it may have to increase the cost of Prime, which currently costs $79 a year, in the U.S. by $20 to $40.

Neil Doshi, an tech stock analyst in San Francisco with CRT Capital Group, thinks most people won’t mind a $20 increase but a $40 jump “might be hard for consumers to swallow.”

“I do not expect there to be so much angst against this price increase, but I do expect there to be some modest churn,” Doshi said.

Amazon said that its net shipping costs jumped 19% to $1.21 billion in the fourth quarter. That was 4.7% of net sales, up from 4.5% a year earlier. Expenses like this contribute to the company’s wafer-thin profit margins, which have been a concern on Wall Street for years.

“They can’t keep losing so much. This is their profit margin,” Colin Gillis, an analyst at BGC Partners told USA Today. “Drones aside, they have to find a way to get the package from the warehouse to the user in a timely way but also in a cost-effective way.”

CNN Money reported the Amazon Prime price increased surprised analysts. “The way they went about announcing it just didn’t seem very Amazonian,” says Mark Mahaney, managing director at RBC Capital, who expected a digital letter by Jeff Bezos. More importantly, Mahaney says he doesn’t see “a financially obvious reason” to raise prices, pointing out that Amazon’s shipping costs seemingly remain stable.

There’s no telling when or if Amazon will raise its prices.

Prime members get two-day shipping on a large number of Amazon items at no extra cost, plus the ability to borrow Kindle books and stream movies.

Amazon has quadrupled in size to 108,000 in four years and the price of Prime hasn’t changed since it started nine years ago. The number of products available for free two-day shipping has grown from 1 million to 19 million, and the program now includes movies, electronic books and the prospect of same-day shipping in the near future.

Amazon Prime Price Increase

CNBC Discussing Amazon Prime There has been some speculation this week from analysts that Amazon should raise the price of its Amazon Prime service to cover increased shipping costs.

Amazon considering raising price of Prime

Amazon is considering raising the price of its free 2 day shipping option by as much as $40.

Amazon Prime Price Increase: No Reason to Panic

Jim Cramer says there is no reason to panic about Amazon’s latest earnings report.

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AI Researchers Asked Amazon To Stop Selling Rekognition To Law Enforcement

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AI researchers asked amazon to stop selling Rekognition to the police

The rise of the facial recognition technology has been shrouded with controversy as issues of privacy and abuse become the central concern in handling the said innovation. Companies producing the technology, like Amazon, have repeatedly been slammed for their move to sell their version of the technology, the Rekognition, to law enforcement agencies amid calls to stand down following the uncovered flaws in the software’s system.

Now, the world’s leading artificial intelligence experts, tech researchers, and academics joined together to call out Amazon for selling their “flawed” system to law enforcement agencies, racing concerns of security and police abuse aided by Rekognition.

The experts – together those from Amazon’s competitors like Google, Microsoft, and Facebook – published through an open letter to Amazon, the different issues they raised against Amazon and the Rekognition. They are also asking the company to stop selling the software to the police.

“We call on Amazon to stop selling Rekognition to law enforcement,” the open letter highlights.

The letter was premised on the recent study conducted by Inioluwa Deborah Raji and Joy Buolamwini, published at the AAAI/ACM conference on Artificial Intelligence, Ethics, and Society, where the researchers found out that the version of Amazon’s Rekognition tool which was available on August 2018, has much higher error rates while classifying the gender of darker skinned women than lighter skinned men (31% vs. 0%).

In January, Amazon came into heavy scrutiny after the researchers from MIT and the University of Toronto have found out that their facial analysis software mistakes dark-skinned women to men. Results have shown that Amazon’s facial analysis have mistaken 31% of black women as men compared to 7% of white women being mistaken to men. The results also revealed that the analysis for men has essentially no identification.

Citing a statement from Amazon’s vice president Michael Punke discrediting the study conducted by Raji and Buolamwini, the letter notes several important facts “reinforcing the importance of the study and discussing the manner in which Wood and Punke’s blog posts misrepresented the technical details for the work and the state-of-the-art in facial analysis and face recognition.”

According to the open letter, there is an “indirect or direct relationship between modern facial analysis and face recognition (depending on the approach)” and that the findings of the earlier study could severely impact people’s lives, especially when applied by law enforcement.

This specific argument responds to a statement made by Amazon’s Web Services’ General Manager of Artificial Intelligence, Matthew Wood. He argues that facial analysis and facial recognition are not one and the same.

“Facial analysis and facial recognition are completely different in terms of the underlying technology and the data used to train them. Trying to use facial analysis to gauge the accuracy of facial recognition is ill-advised, as it’s not the intended algorithm for that‎ purpose,” he said.

The AI experts in the open letter raised that there are no laws or standards to ensure that the use of Rekognition remain in the manner that “it does not infringe civil liberties.”

“There are currently no laws in place to audit Rekognition’s use; Amazon has not disclosed who the customers are, nor what the error rates are across different intersectional demographics. How can we then ensure that this tool is not improperly being used as (Amazon Web Services GM for deep learning and AI Matthew Wood) states,” the open letter reads.

According to the signatories of the letter, what can be relied on in the absence of legal controls are analysis and audits of independent and unbiased researchers “with concrete numbers and clearly designed, explained, and presented experimentation, that demonstrates the types of biases that exist in these products.”

These independent studies, as the open letter said, are critical in raising alarms on using such “immature technologies” in volatile scenarios to ensure that privacy and other civil liberties are not infringed.

In the past, 85 social justice advocates, human rights activists, and religious groups have also collectively sent a letter to Microsoft, Google, and Amazon to ask them not to market their facial recognition software to the government.

Google has said that it will not be selling its technology unless all racial bias and misidentification issues are addressed while Microsoft has acknowledged that it is their company’s duty to ensure that their technology is used responsibly. On the other hand, Amazon has reportedly given a demonstration of their product to Immigration and Customs Enforcement Agency and will pilot the use of Rekognition to the FBI.

In the new letter to Amazon, 55 artificial intelligence researchers and tech experts from various universities across the United States have attached their virtual signatures. A registry for those who agree with the letter is also open for other experts to affix their signatures as well.

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Amazon Knows What You Like And May Send Samples To Prove It

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Amazon will send samples based on your own preference

Everybody loves surprises and gifts, especially when these presents are your personal favorites. To some, there is a level of satisfaction knowing that you have made someone happy. The best people who may send you gifts are your family and friends, who know what you like. But, what if I tell you that other than your closest friends and relatives, someone will send you the same thing that you’re dreaming of having? Would this scare you?

Actually, it’s just Amazon.

Amazon steps up the game and aces other online retailers such as Best Buy and eBay. It is now sending samples and freebies to its potential customers based on consumers’ data.

Amazon is working on new ways to capitalize on its user data to boost purchases. This move is under the company’s current sampling program with a primary goal to maintain customers’ loyalty. Today, the top 20 products featured on its website are expected to deliver samples to its loyal customers. These items include BSN’s Protein crisp, Maybelline’s mascara, and Oxi-clean.

This program is one of Amazon’s rewards to its faithful customers who have been purchasing products for a long time. However, this comes as a surprise for many who don’t know about the program until they have received samples right on their front door. The package automatically includes a note with instructions on how to opt out in the program if customers don’t want to receive another sample in the future.

Sampling programs have been available in various iterations on Amazon over the years including a program that allowed primary members to purchase trial size products.

How Amazon does its technique to attract customers remains a mystery to some of its competitors. Based on the previous reports, the company topped the survey for online retailers and sellers in the country from 2018 until now. The business industry coined it as ‘Amazon Effect’ in 2018, where the retail giant’s success resulted in the bankruptcy of some companies including Best Buy.

Best Buy rose from ashes and created a new retail paradigm to keep up with its name in the field of online business. The company launched its “Renew Blue” strategy which focused on the five key pillars to improve and strengthen its business. One of its procedure includes a physical store. This technique allows consumers to experience essential physical interaction with certain products where they can purchase online but do not have to wait for products to be shipped or delivered to their home.

Now, Amazon depends on its marketing strategy to increase its sales. Its new style is undoubtedly enjoyed by many. One customer received a physical sample box of protein bar on his home in New York. Amazed by the surprise gift from Amazon, he posted a photo on his Twitter account drawing a lot of attention from the public.

Brandon Mullins has been a consistent purchaser of BSN protein powder through Amazon. With his records and history on protein purchases, he is likely the type of customer the company wants to target.

For BSN, the new technique allows them to introduce its latest products based on their customers’ history purchases. Generally, Amazon offers this style to its brand sponsors as a way to boost buying and increase customer satisfaction. However, if you think that this is free, well BSN, although did not disclose how much they paid Amazon, confirmed that a lot of money was involved in delivering door to door samples to every consumer.

Amazon takes the competition into a higher level. From its recommendation style, which offers customers an idea of what to search for a specific product, including items bought by others and trending purchases based on search frequency to today’s sample program.

As the e-giant continues to make history, others argued that this might violate data privacy act in the country. To send target samples to every prospect, the seller should access one’s sensitive data and purchase information which can be used against them once the issue reaches higher grounds.

But, if persistent advertisers do not creep you out in the online world, then it is only reasonable that the company is just strengthening the bond between its consumers and its brands.

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Amazon Plans To Open Physical Grocery Stores

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Amazon to open physical grocery stores

Amazon is planning to open its own set of new grocery stores across the major U.S. cities at the end of the year; the Wall Street Journal reported, Friday. The article said that the information came from ‘people familiar with the matter,’ but did not mention who these people are.

According to the report, Amazon’s plan to launch physical grocery stores is its attempt to broaden its reach in the food business and touch more aspects of consumer’s lives.

The sources reveal that Amazon’s grocery store will have its first outlet in Los Angeles, that will be open possibly before the end of the year. Additionally, the world’s biggest e-commerce platform has signed leases for at least two other grocery store location with a possible opening early next year. However, details of where these locations will be are still unclear.

Furthermore, Amazon is also looking at opening its own grocery store line in San Francisco, Seattle, Chicago, Washington D.C., and Philadelphia, the sources revealed.

Wall Street Journal said that its sources claimed that the new grocery brand would be different from Whole Foods Market chain, which the company purchased two years ago. It is not meant to compete with upscale Whole Foods but instead offers a variety of products at a low price point, different from WFM’s selling proposition of offering products with no artificial flavors, colors, preservatives, and sweeteners.

These people who claim to know about the plan did not mention whether the grocery line will carry the ‘Amazon’ name.

WSJ wrote: “After two decades of upending the retail industry by shifting shoppers to the internet, Amazon in recent years has become increasingly focused on physical retail, posing a threat to traditional grocers. The new chain would help Amazon in fulfilling a yearslong initiative to build out a physical grocery presence, which was at one point potentially envisioned to reach more than 2,000 brick-and-mortar stores in a variety of sizes and formats.”

For the last few decades, Amazon has grown as a company from a website that sells books and music that it initially was. Now, the company is a leading cloud computing agent, a significant player in Hollywood entertainment, a stakeholder in the world’s logistics service, and just recently have explored the world of digital advertising, finance, and health care.

Amazon, who briefly took the crown as the world’s most valuable public company, is set to broaden its portfolio to serve lower-income consumers. Recently, the company offered discounted versions of Amazon Prime to customers who are eligible for Medicaid and other government assistance programs.

“Amazon has had mixed results with its food-delivery business, and it wants to understand better how it can cater to grocery shoppers, according to people briefed on the company’s strategy, ” Wall Street Journal wrote.

After The Wall Street Journal reported news of Amazon’s plans Friday, share prices of other supermarket operators tumbled, with Kroger losing 4.5% of its value and Walmart ending down 1.1%. Amazon shares rose 2% on the day.

Amazon’s new grocery brand comes as roll out of cashier less Amazon Go that has since been tested in different upscale markets around the United States.

It is still, however, unclear whether or not the new physical stores of Amazon will be cashierless. One thing that the sources said is that the company is tilted towards customer service and pick – up capabilities. It is also heavily rumored that Amazon will have attached parking lots to speed customers’ ability to get the groceries.

These people have said to WSJ that Amazon is targeting new developments and occupied stores with leases that are about to end.

They teased that the new physical grocery stores could be in strip centers as well as open-air shopping centers. It is also revealed that the stores will be in about 35,000 square feet, a little smaller than the typical 60,000-square-foot supermarket.

“Amazon doesn’t want restrictions on the type of goods it may sell at its stores and wants the ability to change the store and sell health and beauty products; for instance, the people familiar said. Leases in shopping centers often include limitations so that businesses complement rather than cannibalize each other,” they added.

Several analysts have suggested that the strategy of mixing e-commerce with physical stores is the direction the e-commerce industry is heading.

Customers want to be able to shop when it is most convenient for them, which could be in-store, online or a combination of the two,” said a spokeswoman from the International Council of Shopping. /apr

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