Q: SHOP and AMZN announced 'buy with prime' will now be available on SHOP. How big a deal is this? What will it allow customers to do that they couldn't do before? Was SHOP losing sales before?
5i Research Answer:
We think it is a 'win' for both parties. But, as SHOP is much smaller it likely will benefit much more. SHOP merchants get access to Buy with Prime, which gets them into the AMZN fulfillment network. They access more potential customers and have less incentive to leave SHOP. AMZN gets potentially more business and enhances the value of a Prime membership overall. We would consider it a good deal for SHOP, certainly, but its financial impact remains to be seen, of course. The stock is up 8% pre-market which we think is probably a bit too much, based on this news.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in AMZN.