Hi °C | Lo °C If you have visited Amazon's UK site recently (www.amazon.co.uk) you will have been greeted with an invitation to join an exclusive club. The site is asking visitors to sign up to a new service - Amazon Prime.
For £49 a year, you get unlimited free one-day delivery on millions of the internet retailer's products.
This has the potential to end that irritating decision-making process at the check-out: pay for speedy delivery or the free version, which takes three to five days longer?
Amazon's solution throws up a number of interesting questions – not least whether it can live up to its promises.
While the scheme has been operating in the US for two years and in Japan for six months, an internet search will bring up a number of critical web postings about it (some dating from the early days of the service in America, it should be pointed out).
Once you have signed up, you can order as many items as you want – all with one-day delivery. If you live in London or Birmingham, you can opt for receiving your goods the same evening for an extra payment of £7.49.
Amazon's founder, Jeff Bezos, has likened it to an "eat-all-you- want" buffet.
The problem from the company's viewpoint is that when you open an eat-all-you-want buffet the biggest eaters turn up first, putting pressure on the service at the outset before it has time to establish itself.
The benefit for Amazon, of course, is that it encourages what's known in the trade as cross-shopping.
Put another way, visitors are likely to buy more because the postage costs have been ruled out of the equation.
The real masterstroke here, however, is that it invites a kind of " enforced" loyalty.
Anyone who has stumped up £49 for membership is less likely to shop with a competitor, unless there's a substantial difference in the purchase price.
The other thing Amazon Prime does is shorten the gap between purchase and receipt of goods, which has always been the big downside of internet shopping.
One factor that has enabled high street stores to survive and prosper is the ability of customers to touch the merchandise and take it home with them.
Amazon and other web retailers are attempting to shorten the gap to a day at most.
Same-day delivery is what every online shopper would opt for, given the choice.
Sadly, companies promising such a service during the dotcom boom, Kosmo and UrbanFetch, became toast – to use urban slang – after discovering that being able to deliver in major cities within 30 minutes of an order being placed didn't necessarily translate into profit (see http:// en.wikipedia.org/wiki/Urban fetch and http://en.wikipedia. org/wiki/Kozmo.com).
But while the fastest possible delivery is a noble aim, you simply can't please all the people all the time.
If you live in parts of Northern Ireland, for example, the system isn't guaranteed – see the small print at www.amazon.co.uk/ prime under the " learn more" link.
The real benefit from an internet retailer's point of view is creating a community. Members of that community are much more likely to visit again and again, to take advantage of the benefits that membership provides and - in Amazon Prime's case - to get more than their money's worth.
This may cost the retailer money in the short term, but pay off in the longer term – particularly when Amazon plans to expand the range of products it offers.
Jeff Bezos says there is no reason why the company can't sell everything.
That may be a slight exaggeration, but it has already moved into grocery sales in the US and doesn't rule out challenging the major supermarkets.
Creating a community is one thing, but charging that community a regular fee has its own pitfalls (see www.red-sweater. com/blog/421/amazon-prime-rip off-or-not). There is also the risk of customers buying more than they want or can afford.
From a business point of view, though, it's a neat move that once again leaves Amazon's competitors playing catch-up.
Bill Law has 30 years' experience in IT, and works in the industry for Fujitsu Services in Northern Ireland. The opinions expressed are his own and not necessarily those of Fujitsu Services. He can be contacted at Bill.H.Law@uk.fujitsu.com.
