Free shipping, not entertainment, is the primary driver of Amazon Prime memberships, said a Wednesday Diffusion Group report, saying more than half of U.S. adult broadband users are Prime subscribers. Nearly four in five Amazon Prime users said free shipping topped reasons for subscribing to Prime, 11 percent citing Prime Video and 10 percent naming Prime Music, photos, reading, Twitch or other benefits. Folding digital media into Prime memberships has “sweetened the deal and brought many new subscribers into the mix,” but service value shifts from media to free shipping as members buy more merchandise, said TDG President Michael Greeson. The retail perks differentiate Amazon from streaming media competitors including Netflix, Hulu, Spotify and Apple, but its Prime streaming offerings are “largely loss leaders to Amazon's cash-cow retail business,” Greeson said.

The House Judiciary Committee will hold a hearing on the Supreme Court’s recent Wayfair decision (see 1807020035) and its impact on consumers and small businesses. The hearing is set for 10 a.m. Tuesday in 2141 Rayburn.

Amazon will open a 600,000-square-foot fulfillment center in Spokane, its first in the eastern part of Washington, it said Friday. The center will create more than 1,500 jobs with benefits, said the company. Spokane employees will work alongside Amazon robots to pick, pack and ship items, it said.

Hours before the 3 p.m. EDT start of Amazon Prime Day (see 1807160059), NPD reported that its Checkout receipt-mining service found online consumer tech dollar purchases jumped 16 percent in the 12 months ended May from the same period a year earlier. E-commerce shopping “continues to increase across the consumer electronics landscape,” said NPD Monday. The average spending per purchase declined 7 percent year over year, “indicating that while more purchases are being completed online, these transactions are increasingly from categories that have items with lower average selling prices,” it said. NPD estimates 43 percent of the U.S. adult online-buying population made at least one consumer tech product purchase in the 12 months ended May, an increase of six percentage points from a year earlier, it said. Mobile phone accessories (22 percent) were the most popular items purchased, followed by portable audio (18 percent) and portable chargers (13 percent). “Growing online purchase frequency, especially of lower priced ‘grab and go’ items such as phone cases, screen protectors, portable chargers, and wired headphones, is shifting customer traffic from in-store to online,” said Stephen Baker, NPD vice president-industry adviser. “This shift is why today’s retailers focus on driving consumers into the store for big ticket, highly interactive purchases like TVs, where a benefit can be seen to shopping in a physical store, and allowing the online channel to focus on more transactional consumer interactions.”

Amazon released a mashup of deals due to hit the online sale bin “at various times between now and Prime Day” to be held this year beginning July 16 and run running through July 17. Clothes and furniture led the items it featured, including a girls’ tutu tank dress and skirt set ($18.20) and a Bradbury sofa ($1,085). Tech items listed in the Thursday news release cited a Franklin Shelf and USB charging station floor lamp for $109, but when we clicked on the link we were taken instead to a Rivet Franklin Shelf table lamp with a USB charging port for $89, not yet marked as a deal. Amazon also listed an AmazonBasics dual charging station for Xbox One that will discount to $17.48 from its regular $24.99 price tag sometime during the promo period. From Thursday through July 15, AmazonBasics electronics accessories will be discounted by up to 20 percent, it said.

A group of Senate Democrats is preparing a letter to the Small Business Administration asking it to help small companies cope with the Supreme Court’s recent South Dakota v. Wayfair (see 1806210067), Sen. Jeanne Shaheen, D-N.H., told us Thursday. Shaheen joined Sens. Jon Tester, D-Mont.; Ron Wyden, D-Ore.; Jeff Merkley, D-Ore.; and Maggie Hassan (D-N.H.) in introducing a resolution opposing the court decision and the Marketplace Fairness Act. Shaheen said the group planned to have sent the letter Thursday. It’s unclear how states are going to respond, she said, so Congress needs to let things play out initially. That way, lawmakers can decide if Congress should provide some parameters “for what the court decision might mean,” said Shaheen. “I’m concerned about anything that would require small businesses, particularly in states like New Hampshire that have no sales tax, to collect taxes for tens of thousands of localities across the country."

Amazon didn't respond to our questions after TechRadar posted Thursday what appeared to be a leak of Amazon's 2018 Prime Day date. An ad, which showed briefly on Amazon's U.K. website, gave a date of July 17 for Prime Day, with deals beginning the day before. Last year, the Prime Day sales event, promising discounts for Amazon Prime members, was July 11.

E-commerce, though growing “rapidly around the world,” also brings with it “significantly more” product returns than in the past, said Raj Subramaniam, FedEx chief marketing and communications officer, on a Tuesday earnings call. FedEx is expanding its “returns technology” and is adding more FedEx Office store locations to cope, including the first 50 inside Walmart stores and “opening in time for the upcoming peak season,” he said. “We anticipate adding a total of 500 FedEx Office locations inside Walmart stores over the next two years.” The separate FedEx Onsite program also continues to expand with Walgreens, “and we already have almost 11,000 packaged pickup locations in the U.S.,” said Subramaniam. “This program is all about convenience and brings FedEx ever closer to consumers,” he said. Customers like that the Walgreens locations “are open later in the evening” than most regular FedEx stores, including 700 that are open 24 hours, he said. The fear of “porch piracy,” having packages stolen when left at the front door, also is luring consumers to the Walgreens FedEx locations, he said. Recent surveys found 75 percent of online shoppers “were concerned about porch piracy,” and 45 percent had a package stolen or knew someone who had, he said. FedEx doesn’t see any near-term commercial viability in using drones to transport or deliver packages, said Chief Information Officer Rob Carter. “Drones are still really specializing in observation and inspection with sophisticated optics and their ability to look at aircraft and airframes,” said Carter. “That's a very advanced capability that we're already using today. But things like lift and range are limiting their use in transport, although we're testing them in some of our larger ramp facilities to deliver parts to mechanics and things of that nature.”

Toy companies met Senate Finance Committee, Customs and Border Protection, Consumer Product Safety Commission and Alibaba and Amazon representatives June 14 to discuss intellectual property issues, the Toy Association said Tuesday. "Participating toy companies spoke about their experiences tackling infringing toys sold online and discussed possible solutions to improve toy safety and IP protection on e-commerce platforms." The committee is looking at online counterfeit good sales (see 1805300068). "CPSC’s director of import surveillance said that the volume of e-commerce packages, lack of data, and enforcement procedures designed for ocean containers (not de minimis shipments) have collectively resulted in numerous challenges," the association said. CBP reportedly is interested in training association members to identify counterfeits.

Though much of the focus of Amazon’s drone development has been on the Amazon Prime Air initiative and its ultimate promise of delivering packages to customers in 30 minutes or less, Amazon Technologies landed a U.S. patent Tuesday that uses drones for the more efficient movement of inventory within the four walls of the warehouse. The patent (10,000,284) describes a “collaborative unmanned aerial vehicle for an inventory system” and was based on a June 2015 application. Modern inventory systems “face significant challenges in responding to requests for inventory items,” and those challenges become “non-trivial” with the growth of those systems, especially when stock needs to be split between ground floors and upper “mezzanine levels within a large structure,” it says. “Suppose that” Alice, an inventory management “agent,” needs to fill an order for items “on both the first floor and on the mezzanine,” it says. “To accomplish the formerly laborious task of obtaining all of these items, Alice can place a request for the items with an inventory system,” which can quickly “dispatch autonomous ground drive units on both the first floor and on the mezzanine to collect the items,” it says. “At the mezzanine, the items can be collected at a staging point and consolidated into a container for transport.” The staging point may double as a “docking station” for a drone, which can “subsequently lift the container and transport the items to a staging point at the first floor, where all of the items for the order can be consolidated and provided to Alice for shipping,” it says. Amazon didn’t comment Tuesday on the invention's commercial implications.