Amazon Prime introduces a new benefit to save on gas

By CNN Newsource

Published October 24, 2024 1:17 PM

By Erika Tulfo, CNN

(CNN) — Prime members can now add “fuel discounts” to their ever-growing list of benefits.

The newest perk from e-commerce giant Amazon will allow members to save 10 cents per gallon at the gas pump (up to an average of nearly $70 a year) at around 7,000 participating BP, Amoco, and AM/PM stations across the US.

Members can avail themselves of the discount by linking their Amazon account to Earnify, a loyalty program app by BP.

Data from GasBuddy shows that gas prices are at their lowest since January, but with global oil prices spiking due to ongoing conflict in the Middle East, worries about a potential gasoline price surge remain. Amazon’s newest savings benefit could alleviate some of that potential grief for its over 184 million Prime subscribers.

The fuel discount offering is Prime’s latest addition to its laundry list of member benefits, which span music and video streaming services, food and grocery delivery, and even medical care and prescription drug savings. And in a world where membership programs now seem practically ubiquitous, the move represents Amazon’s efforts to stay ahead of the game.

How Amazon is retaining its lead

Fuel and energy probably isn’t the first sector to come to mind when you think of Amazon, but analysts say that the recent inclusion of gas savings doesn’t come as too much of a surprise.

“Amazon’s view has always been that the more benefits you add and the more rounded you make the program, the more difficult it is to leave,” said Neil Saunders, retail analyst and managing director at GlobalData Retail.

Saunders told CNN that Amazon’s move into gasoline likely stems from a keenness to compete with its rival, Walmart+, which offers similar 10-cent fuel savings at 14,000 U.S. stations.

And as more paid membership schemes like Target Circle 360 and Wayfair’s recently announced Wayfair Rewards program enter the market, Prime is going the extra mile to demonstrate its value to subscribers.

“Other retailers are still playing catch up to Amazon, and Amazon wants to retain its lead,” Saunders said. “So, as the other retailers run faster to add more bells and whistles, Amazon is doing the same thing to keep its position ahead of the pack.”

Still, Amazon’s attempt to position itself as the “everything company” comes with its own set of challenges.

For one, there is customer confusion. According to Saunders, the larger the program, the more diffused it becomes. Customers who take advantage of one benefit might not find any use for another.

Pricing is another issue. An annual Prime subscription costs $139 — that’s around 40% higher than Walmart and Target memberships, which are priced at $98 and $99, respectively. Amazon customers who don’t utilize the full extent of their memberships could feel like they’re getting less bang for their buck and switch to a lower-priced alternative.

“Amazon is going to have to work quite hard to understand how Prime is being used across different memberships to make sure that it actually is offering genuine value rather than just chucking a lot of stuff out there,” Saunders said.