With a 2-year-old daughter and a full-time job, life is hectic for Dallas mom and marketing professional Amanda Tavackoli. Often, there’s not enough time to think about or run to the store to pick up a pack of diapers, baby wipes or paper towels.
“Both my husband and I work full time, so it’s sometimes difficult for us to schedule everything that needs to happen,” says Tavackoli, 37.
Instead of squeezing a grocery run into her busy schedule, Tavackoli opens the Amazon Prime app on her phone, orders her household supplies, and within two days, they arrive at her doorstep.
Convenience, especially for families, is a factor in the popularity of purchasing household goods through subscriptions like Amazon Prime, says Paul Farris, a marketing professor at the Darden School of Business at the University of Virginia.
Amazon Prime reached 90 million U.S. subscribers, according to 2017 data from Consumer Intelligence Research Partners, a Chicago-based research firm. Almost 95 percent of these members said they will “definitely” or “probably” renew their subscription, according to a July to September 2017 survey by the firm.
At the same time, some of Amazon’s brick-and-mortar competitors are struggling to keep up.
Although Costco Wholesale has about 91.5 million cardholders as of November 2017 — 1.5 million more than Amazon Prime subscribers — the membership warehouse had only a 90 percent renewal rate in 2017, according to its annual report.
And Sam’s Club, the membership warehouse owned by Walmart, recently announced plans to close 63 of its clubs throughout the country and is converting as many as 12 of these facilities into e-commerce fulfillment centers. These closures reduced the company’s number of clubs to 597.
In recent years, Sam’s Club has also experienced low membership renewals. At the beginning of 2016, the renewal rate for its Plus members was only about 35 percent, from 2015 to 2016.
Farris says in addition to Amazon’s convenience factor, its free two-day shipping has helped the company dominate the playing field.
“Everybody in the world is trying to figure out how to handle free shipping,” he said. “Amazon has the (sales) volumes to make that work in a way that is much more difficult for other operations to generate.”
And Farris says Amazon’s ability to transcend local supply shortages has also made it and other e-commerce options more popular in comparison with traditional wholesale clubs.
One factor that favors brick-and-mortar Costco is price. In two separate price comparison studies conducted by investing news magazine Barrons in June 2017 and the San Francisco Chronicle in May 2017, Costco’s prices for a basket of top common household items were often cheaper than on Amazon.
However, the price difference doesn’t bother Tavackoli.
“It’s probably a little bit more expensive to go with something like Amazon, as opposed to running over to Sam’s Club,” she said. “But the convenience outweighs the cost for us, hands down.”
These online options for buying bulk are three alternatives to shopping at brick-and-mortar warehouse clubs.
1. Amazon Prime Pantry
One of the most popular perks of Amazon’s Prime membership ($99 a year) is its free two-day shipping. Amazon Prime also offers members in select cities free same-day delivery and same-day delivery for orders $35 and over. For some household essentials, subscription holders can have orders delivered within one to two hours.
Members have access to Prime Pantry, which ships bulky items like paper goods, trash bags, and oversized boxes and bags of snacks, such as chips and granola bars, that people traditionally purchase at warehouse clubs. Delivery boxes hold up to 45 pounds, and there’s a flat $5.99 fee per box.
“My own family’s use of Prime is that it’s so much more convenient,” Farris said. “You don’t have to worry about hauling it back home.”
Prime also gives its members much more than just fast delivery. Prime members can stream music, movies, and TV shows and gain access to Audible channels. There are also deals and exclusive opportunities for Prime members when shopping.
Boxed.com was founded in 2013 by a group of tech entrepreneurs.
Boxed.com gives consumers another way to buy a large variety of brands in bulk online. In addition to simply buying in bulk, Boxed.com customers are offered curated boxes of products. For example, Boxed.com packages a wide range of snack options, like Cheez-Its, peanuts and Pop-Tarts, and ships them together in one box to customers.
With each order, Boxed.com users can choose to receive free samples, much like when shoppers walk down the aisle of a wholesale store like Costco.
And unlike Amazon, Boxed does not charge customers a subscription fee. Orders that meet a minimum price of $19.99 are shipped for free and ship within one business day.
Jet.com is another online one-stop shop that offers everything from household essentials to jewelry and patio furniture.
But Jet’s standout perk is its “real-time savings engine.” This tool allows Jet.com to pack specially marked items in boxes with other products, which the company says lowers the shipping costs for Jet.com and, in turn, lowers the price tag for its customers.
Farris says options like Jet.com could provide specific goods that local stores may not carry or have in stock when shoppers are there in person.
Jet.com, which does not charge a subscription fee, also gives users who know they won’t be returning an item the option to save money by opting out of the ability to return that item for free. Also, for orders over $35, Jet.com ships for free with delivery within two to five days.