Amazon.com Inc unveiled a new version of its successful Prime shipping service on Monday as the world's largest Internet retailer tries to attract more-frequent shoppers with groceries and other everyday household products.
Amazon expanded its AmazonFresh online grocery business into parts of Los Angeles on Monday, after testing the service in its hometown of Seattle for more than five years.
Amazon offered a 90-day free trial of AmazonFresh in LA to consumers who are already members of Prime, which costs $79 a year for free two-day shipping on millions of products.
After the trial ends, customers will be upgraded to a new "Prime Fresh" membership. This costs $299 a year and includes free delivery of orders over $35 of groceries and more than 500,000 other everyday household items.
Amazon's original Prime service encouraged members to shop more regularly on Amazon.com if they wanted to get the most out of their $79 a year subscription fee.
With its new, more expensive "Prime Fresh" subscription, Amazon is betting that this same consumer psychology will get people shopping for groceries and other everyday items even more frequently.
"It's a whole new level of Prime and potentially a new level of customer loyalty to Amazon," said Anne Zybowski, vice president of retail insights at Kantar Retail.