Thursday, May 24, 2018

Amazon Launches Prime Book Box for Children

As we know, Amazon's ability to mix, match and smash business models has no limit, but one thing is clear: Amazon is king of the subscription model.  Recent numbers revealed by Jeff Bezo's about the number of Prime subscribers were, on the one hand, astounding but also entirely believable given the power with which Amazon has asserted itself in the retail channel.

The company continues to enhance their Prime subscription model and recently announced a Children's Book Box product.  Currently in test, the product sells for $22.99 per box and guarantees a 35% discount on the list price of the books included in each box.  Customers can decide how many boxes they want, on what schedule and which age tier they are most interested in.  There are currently four age group tiers from age 'I can't stand up yet' to 12.

Currently, the offering appears to be hard cover (no eBooks) titles and from the announcement the selections will be a combination of classics and new 'selected' titles.  Amazon has kindly made a cute video:

This book box features some of the functionality of existing amazon subscription services which includes confirmation of the shipments in advance, the ability to delay or pass on a scheduled shipment and the ability to substitute selections before they are shipped.   Amazon may be interested in gathering even more information about their audience via this product.  Children, generally speaking, don't make purchases therefore the data on their purchasing behavior gets mixed with many other purchases.  A subscription product like this could provide potentially new data to Amazon.

Aside from independent retailers which face yet another threat from Amazon, there's another market segment which may suffer if this product proves successful and that is the library market.  Both public and school libraries offer curation benefits and subscribe to services such as the Junior Library Guild to supply them will curated titles.   Is it possible that the suppliers and/or libraries themselves could be disintermediated by this type of Amazon service?  Of course, libraries provide other benefits in addition to the curation of children's books so the question isn't so simple, but those curation services cost money (and the books are sold full price).  If Amazon can provide a better service at a good price then they may take market share in the library market as well.

That said, one final point.  There is a substitution factor here.  It may be more likely that the target market for this Book Box product would never step foot in a library.  It may be the case that subscribers to the Book Box buy more (or the same) because the subscription service is so easy and convenient.   Libraries and other retailers may only suffer at the margins.   Regardless, Amazon again shows its' power and scale in being able to spin up a well crafted service like this with relative ease.

Related: WAPO on the best book box subscriptions 

Michael Cairns is a business strategy consultant and executive.  He can be reached at for project work or executive roles.  See here for examples of recent work.

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