Amazon has become a phenomenon in the retail industry. Through the use of Prime, originally just a subscription to fast delivery at a fixed rate, has become a method to foster customer loyalty in an otherwise ruthless sector. Through continually pushing to add more value towards the mere $119 a year subscription, Amazon founder and CEO Jeff Bezos has smashed through analysts’ forecasts, reaching an astonishing 100 million subscribers to the service.
The two-day delivery feature Amazon has so boasted proudly about for many years now continues to be a key source of revenue for the company. Research in 2018 has shown that those who have purchased Amazon Prime in the past use it more now than ever before. Moreover, nearly half of Prime customers spend over $800 annually, as opposed to a just 20% of non-Prime customers. In short, the service is providing an incentive for customers to focus their shopping strictly upon Amazon, for the ease of use and unparalleled speed of delivery.
Amazon streaming services were included to provide added value for Prime membership subscribers, which in turn led to new customers delving into the Amazon retail marketplace. Whilst the success of this plan is undeniable, they have also managed to create highly profitable revenue streams in the entertainment sector, which emphasize the overall success of the business model.
The focus upon constantly adding value doesn’t seem to stop, with Amazon already successfully purchasing the rights to some Premier League football matches for the next three years, alongside a huge purchase of Whole Foods which has taken Amazon into the lucrative grocery market. The scope for the subscription model is enormous, and it is becoming an investment that is more of a consumer necessity in the modern world rather than a luxury.
For further reading, please visit: Amazon and Whole Foods: A new era for organic foods