Amazon’s Jeff Bezos said it counts more than 100 million paying members for Amazon Prime, the delivery and content business that’s at the heart of its sales growth. The CEO and founder, in his annual letter to shareholders, said last year more members joined Prime than in any previous year. The number tops recent analyst estimates.
Amazon’s Prime memberships are an example of a program that is greater than the sum of its parts. Among other things, members get free, two-day shipping and in some areas one-day and two-hour shipping on some items, access to Amazon Prime Video, online storage and some music and a Whole Food rewards program/membership.
But it is the capacity of the program to more tightly-knit customers into the Amazon ecosystem that make it so valuable. Once members have access to free shipping, they immediately begin ordering more on Amazon and less elsewhere. Once they have access to Prime Video, they have less incentive to sign up for other streaming video offerings. As Amazon adds more perks leaving the system becomes less likely.
And once inside, they do more and more of their shopping there. Prime subscribers spend a lot more on Amazon — $1,300 per year on average — compared to about $700 for non-Prime members, according to Consumer Intelligence Research Partners.
“One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up,” said Bezos.
