Amazon is making a strategic move into ultra-low-cost shopping just as holiday spending kicks into high gear. The retail giant announced today the beta launch of “Amazon Haul,” a new shopping experience within its mobile app featuring products priced at $20 or less, with most items under $10.

The timing is particularly significant given that 56% of Americans have purchased from Chinese marketplaces like Temu in the last six months, according to Salesforce’s November 2024 Consumer Sentiment Survey. The survey also reveals that 69% of American shoppers who buy from these marketplaces plan to continue purchasing through the holiday season.

Here are five key insights about Amazon’s new venture.

1 – Beyond low prices

Amazon Haul represents a striking departure from the company’s traditional shopping interface. The experience features younger-skewing language, with product deals labeled as “crazy” and liberal use of emojis throughout the interface.

Even the name “Haul” itself taps into popular social media terminology, where young consumers share their discount shopping discoveries. Gone are Amazon’s familiar star ratings, replaced with “best selling” badges and a more playful color scheme that creates a distinctly different vibe from the main Amazon shopping experience.

While low prices are the primary draw for other ultra-low-price shopping apps like Temu (61% cite this as their main reason for shopping on Chinese marketplaces, according to Salesforce), the entertainment value of these shopping platforms plays a crucial role in their success.

Salesforce’s November 2024 Consumer Sentiment Survey reveals that among the 21% of Americans who find these marketplaces more enjoyable than traditional shopping, half say it’s because they can make impulse purchases at low prices, while 47% specifically enjoy the “treasure hunt” experience.

2 – Strategic Shipping Messaging

While Amazon’s announcement notes delivery times of one to two weeks, the company prominently displays that “75% of orders are delivered within 7 days” throughout the app.

This messaging appears carefully calibrated, as Salesforce’s research show that 17% of consumers cite fast shipping as a factor in their Chinese marketplace purchasing decisions.

Orders over $25 qualify for free delivery, with a $3.99 fee for smaller orders.

3 – Trust Through Fulfillment

Amazon is leveraging its established fulfillment infrastructure, with items displaying as “shipped by Amazon, sold by XYZ shop” – similar to its successful Fulfillment by Amazon (FBA) program, where orders from Third Party Sellers are fulfilled by Amazon.

This context was included in Amazon’s announcement, with Dharmesh Mehta, vice president of Worldwide Selling Partner Services at Amazon saying that Amazon Haul is backed by Amazon’s A-to-z product guarantee, “so customers can shop with confidence that the products they’re purchasing are safe, authentic, and in the condition expected.”

Amazon’s A-to-z Guarantee protects customers purchasing from third-party sellers by covering timely delivery and item condition, offering refunds if issues arise.

This approach may help address consumer concerns about reliability, as the Salesforce survey indicates that 37% of those not buying from Chinese marketplaces cite payment security concerns as their primary reason for hesitation.

4 – Competitive Pricing Structure

Price sensitivity is reaching new highs, with two-thirds of global shoppers reporting that prices will dictate where they choose to shop in 2024, up significantly from 46% in 2020. Amazon’s pricing strategy for Haul appears carefully calibrated to this reality, while also encouraging larger basket sizes that could improve profitability.

The ‘Haul’ store maintains strict price limits of $20 or less per item, positioning it squarely against ultra-low-cost competitors. However, Amazon adds a unique twist with volume incentives: customers can save 5% on orders over $50 and 10% on orders exceeding $75. This tiered approach could help Amazon capture a larger share of consumer spending, particularly given that Salesforce data shows the majority of shoppers typically spend $25-$50 per order on Chinese marketplaces.

5 – Beta Status and Discovery

Currently, the store maintains a beta designation and isn’t prominently featured in the main app navigation, in itself creating an sense of exclusivity.

Amazon says that customers can find Amazon Haul in the Amazon Shopping app by searching “Haul” in the search bar, navigating to Amazon Haul from the main menu icon, or by going to www.amazon.com/haul on their mobile device browser.

In my own Amazon app, I was able to find the Haul store by asking Amazon’s AI assistant Rufus about it.

Will ‘Amazon Haul’ really challenge the competitive landscape?

Salesforce’s survey found that trust was a key reason for consumers who had avoided so far. It’s possible that Amazon’s established fulfillment capabilities and A-to-z guarantee could attract a segment of consumers who have so far been leery of the current raft of ultra-low-cost shopping apps.

But Jouzas Kaziukenas is one retail industry expert who is skeptical about the initiative’s potential impact. “It will fail to slow down Temu/Shein,” the founder of retail intelligence firm Marketplace Pulse said in a post on LinkedIn. “It is a hobby experiment for Amazon; you might even call it a distraction.”

Amazon Haul’s launch represents a significant shift in the company’s approach to value-conscious consumers. While it’s too early to predict its success, the timing and positioning suggest Amazon recognizes the growing influence of ultra-low-price marketplaces on American shopping habits, particularly among younger consumers.