Friday, January 24, 2014

Amazon's Subscribe and Save Program now in Japan

Amazon's Subscribe and Save program is now operating in Japan. For that don't know what it is, it is a shopping subscription whereby certain consumable items can be purchased at a discount if the buyer "subscribes" to a scheduled delivery of the item, once every month to every 6 months. This is really quite a novel concept in that shoppers can now subscribe to receiving their regularly purchased items much like a cable subscription, and have them delivered at regular intervals. The benefits include free shipping to your door and not having to think about shopping for the items.

Currently in Japan, most people use Coop to order their consumables, a large company that delivers fresh food and other items on a subscription basis. You order your items from a magazine and fill in how many of each item you want on an order sheet and leave it outside your front door. Each week, your ordered items come to you and are left outside your door in a locked box packed with dry ice that only you have the key to. 

But this new program from Amazon will be a real threat to traditional Japanese businesses that work like Coop, and certainly to traditional grocery retailers as well such as Daiei. To top it all off, Amazon's prices in Japan are rock bottom for some items. Gillette Mach 3 razor blades for example can be found in most drug stores for around 1,500 yen (pack of 8). You have to search far and wide to get the blades for 1,350 yen. Amazon is currently offering the same blades for 1,190 yen, and if you have a Prime membership (a mere 3,900 yen a year), next day shipping is free. The blades are 1,072 yen with the subscription to  the Subscribe and Save Program, which is free and can be stopped or modified at any time.

It will take some time for such a subscription concept to catch on in Japan, particularly for consumable food items, as Japanese customers are very slow to adopt new ways of thinking. But as more and more people see the benefits of this, Amazon will continue to grow and solidify its hold on the Japanese online market.