"Warehouse club members tend to be higher income households with kids — the type of shoppers that have huge lifetime value to retailers."
Assuming that this is true, I think this is a brilliant, long-tail, idea from Amazon. If the kids get accustomed to seeing Amazon boxes full of stuff arrive every week, when they move out on their own they probably will also buy from Amazon. Similar to computer manufacturers (e.g. Apple, Microsoft) giving educational discounts to schools/students. It's hard to know if this implementation will work but I would start worrying if I were Costco/Sam's. Amazon has shown that they do find innovative approaches to markets. If this approach doesn't work they'll come out that will later on.
I am a 25 year old single male, and I am a Costco member. Mostly because I believe in their employment practices, and the quality of the products.
Where else can I get meat that I know has been properly inspected (and if it hasn't, Costco will remove it from the shelves)? Buy fresh vegetables at a cost lower than my local King Soopers or Safeway.
Amazon will never replace those for me, also, being 25 I tend to procrastinate, I don't have time to wait for Amazon to ship me cleaning supplies. When I am out I want it now, drop by Costco I get it now... that's important to me. I don't think Costco has anything to be afraid of.
If the US population were 313 million clones of you, and they all lived by a Costco, sure, nothing to be afraid of. I've never heard of King Soopers and don't shop at Costco. My phone charger broke yesterday; the replacement I ordered from Amazon yesterday afternoon will be delivered free any minute now (ed: now it's here, less than 24 hours later).
Assuming that this is true, I think this is a brilliant, long-tail, idea from Amazon. If the kids get accustomed to seeing Amazon boxes full of stuff arrive every week, when they move out on their own they probably will also buy from Amazon. Similar to computer manufacturers (e.g. Apple, Microsoft) giving educational discounts to schools/students. It's hard to know if this implementation will work but I would start worrying if I were Costco/Sam's. Amazon has shown that they do find innovative approaches to markets. If this approach doesn't work they'll come out that will later on.