Amazon.com Inc. is expanding its Buy with Prime business services to most online merchants nationwide by the end of the month, and Shopify Inc. shares suffered from the announcement Tuesday.
Amazon’s move will allow more businesses that don’t sell directly on the e-commerce giant’s website to use its payments and delivery infrastructure to handle orders on their own sites. It will ratchet up competition with Shopify, which offers a similar service, by expanding a rollout of the Buy with Prime service in April last year that was invitation-only.
Shares of Shopify SHOP,
Buy with Prime allows Amazon’s Prime members in the U.S. to shop directly on independent businesses’ online stores that aren’t on Amazon’s website. Amazon, in turn, processes the payments, packaging, deliveries and returns of customer orders.
Amazon, in a release, said Buy with Prime boosted what it called “shopper conversion” by 25% on average, citing its own data. That conversion, it said, “measures the average increase in shoppers who placed an order when Buy with Prime was an available purchase option versus when it was not, during the same period.”
The expanded rollout of the Amazon service comes as the online retailer cuts thousands of jobs amid concerns about the economy and demand during the holiday shopping season and fourth quarter overall. Amazon, in October, forecast fourth-quarter sales that were below Wall Street’s expectations.
Discounts proliferated online and in stores during the holiday season, as retailers tried to clear items like clothes, computers and electronics from their shelves after an online buying spree during the early part of the pandemic. Then, consumers shifted away from those products last year as rising prices for basic necessities kept them from doing more leisure shopping.
Prices of online goods fell 1.6% year over year in December, marking the fourth straight month of such year-over-year declines, Adobe ADBE,
Over the past 12 months, Amazon stock has fallen 44.4%, while Shopify shares have dropped 67.5%. By comparison, the S&P 500 index SPX,
