Amazon is considering new subscription programs across grocery and healthcare, a potential shot in the arm for its Prime membership program.
The proposals include new standalone membership programs for Amazon’s grocery and healthcare offerings, and a potential integration of One Medical’s primary care service with Prime, according to people familiar with the matter.
One of the ideas is to offer One Medical’s service at a discounted price to existing Prime members, one of the people said.
The company is hoping to launch the new services by the end of this year, though those plans could change, or get canceled, the people said. They asked not to be identified discussing private matters.
Internally, the new subscriptions are a hotly debated topic, one of the people said. Adding new healthcare or grocery benefits to the existing Prime program would likely raise the membership fee, making it too expensive for some users. But launching too many standalone subscription programs could potentially dilute the Prime brand, which has seen growth slow recently.
Amazon is struggling to attract younger customers and low income households to use its Prime membership program, one of the people said. Most upper income households in the US are already Prime members.
In an email to Insider, Amazon’s spokesperson declined to comment on the specifics of this story. The spokesperson, however, added that Prime membership continues to grow year-over-year, and participation in Prime Access, a discounted membership for qualifying government assistance recipients, increased by more than 390% from 2019 to 2022.
Amazon Prime, which raised its price to $139 a year in the US last year, offers a number of benefits, including free shipping and access to video streaming content. Amazon’s health arm consists of an online prescription service and on-demand virtual care, among other services. Amazon acquired One Medical for $3.9 billion in 2022, and Whole Foods for $13.7 billion in 2017.
The moves could accelerate Prime’s growth. The subscription program has more than 200 million members worldwide and is a key part of the company’s business because Prime members tend to buy more frequently and spend more on Amazon’s e-commerce site.
Amazon’s subscription revenue grew 13.5% to $9.89 billion in its most recent quarter. That was a slight improvement from the 10.1% growth in the same period of last year, but a big drop from growth rates of more than 30% in prior years. Aside from Prime, Amazon offers separate subscriptions for video and music streaming, as well as its Audible audiobook service.
Amazon has also been spending heavily on video streaming content, including The Rings of Power and Thursday Night Football, to try to attract new Prime subscribers. TNF has so far performed well. Rings of Power, not so much.
Amazon started charging for grocery orders under $150 earlier this year. Previously, Prime members received free grocery deliveries on orders over $35.
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