Amazon doubles free delivery minimum spend in UK

Image source, Getty Images

Image caption, Amazon's super saver service can be used to save money on items dispatched from its warehouses

4 May 2015

Amazon has doubled the minimum spend UK shoppers must make before they qualify for "free" deliveries.

The online store will now require its to make use of its "super saver delivery" offer for most purchases.

The facility originally did not have a price barrier when it was introduced in 2009, but a minimum £10 spend was added in 2013.

The latest move comes at a time of historically low UK inflation rates.

It comes a month after the US-based company posted a $57m loss (£36m) for its last quarter.

But one expert suggested the reason was more likely an effort by Amazon to drive more users to a £79-a-year service that covers the next-day delivery of many items, rather than an effort to combat costs.

"There is always a pressure on Amazon from its investors to increase profitability, but I think the bigger factor is trying to shepherd people into Prime membership as well as improving the margins on each basket [of goods sold to others]," said Steve Mader from the Kantar Retail consultancy.

"What we have seen when it increased the minimum threshold in a couple of other markets is that there isn't a significant decrease in the amount of transactions that take place because of the convenience it offers."

Amazon is making an exception for one category of product - any purchase including a £10 spend on books will still qualify for a free drop-off.

Prime investment

The super saver delivery service is limited to goods dispatched to customers from Amazon's own warehouses, and requires them to wait longer for delivery than they would if they had paid for a Prime subscription.

Amazon is also investing heavily in streamed TV shows and movies, as well as other bundled services, to attract new members to Prime.

Image source, Amazon

Image caption, Amazon is investing in streamed media content to make its Prime offer appear more attractive

It recently told analysts it had spent more than $1.3bn on such content in order to deter its users from shopping elsewhere.

"It's certainly impacting our operating results, but we like what we see," said its chief financial officer Tom Szkutak .

"This video content that we're spending [money on] is helping us get customers who buy consumables from us, they will buy clothing from us, they will buy shoes from us, they will buy electronics, they will buy media items."