More than half of American families subscribed at Amazon

An astonishing ninety million Americans have joined Amazon’s subscription program, Amazon Prime. Considering there are 126 million families in the United States, it is clear that Amazon has a tight grip on its home territory. What can Europe learn from this?

Amazon Prime members spend twice as much

More than half of American households are Amazon Prime subscribers and the number keeps growing every day. In the past year, its number of subscriptions grew 38 %, as rapidly as the year before according to Consumer Intelligence Research Partners (CIRP). Two of every three Amazon shoppers have access to the subscription program. The online giant is not worried about it reaching its ceiling: the next step is to increase the number of orders for each customer (‘share of wallet’).

Prime members spend about twice as much on Amazon as non-members: an average member spends about 1,300 American dollars every year. As the subscription isn’t free, many want to get their money’s worth. That not only results in turnover, but also in customer data, which is the holy grail for the e-commerce giant. Amazon Prime is an entire ecosystem with services that go beyond the 2-day delivery that made it famous: free cloud storage, delivery services, music streaming and even its own video service all serve a single purpose, namely to keep the customer coming to Amazon for every single one of its needs.

“Not a subscription, but a way of life”

That strategy seems to pay off: according to a CIRP survey, 95 % of respondents said they will probably renew their subscription and literally no one in the survey was planning to cancel their subscription. Prime is more than a mere shopping portal or a loyalty program, RetailWire’s experts explain.

“Prime is not a subscription, but one of Amazon’s lifestyle products”, they said, especially now that speech assistant Echo is also physically present in an increasing number of houses. This helps Amazon settle alongside consumers in their house and their life. The goal is to be everywhere and to be that omnipotent that there is no way to bypass Amazon.

Can European retailers and brand learn something from this situation? Definitely! First and foremost, they should consider themselves lucky that Prime has not entered our markets to such a degree. Also, they have to be fast and smart to counter Amazon. Whoever can create their own ecosystem and create their own loyal community, can fight off the American online giant.