business news in context, analysis with attitude

by Kevin Coupe

MarketWatch reports that Amazon Prime membership has reached 101 million people, and that 62 percent of Amazon’s US customers are members, spending an average of $1400 annually on Amazon, compared to the $600 a year spent by non-members.

The numbers come from Consumer Intelligence Research Partners (CIRP).

In addition, CIRP estimates that “membership exceeded 100 million in the holiday period, and grew from 26 million in December 2013. More than one-third of members (36%) pay a monthly fee while 58% pay annually and 7% are on a free trial, share a membership, or don't know how the fee is paid.”

Jeff Bezos, Amazon’s founder/CEO, has said that his goal to make Prime membership so robust and attractive that it would be “irresponsible” for one not to be one. It would appear that he is making that argument successfully … that while Prime membership growth has slowed a bit from previous periods, it still has considerable traction.

This is a critical issue for Amazon’s competitors to consider, because the numbers with real power are the ones that go into the algorithms that Amazon uses in analyzing and predicting its customers’ behavior, preferences and desires. I’ve always argued that Prime actually is the world’s biggest and best loyalty marketing program - it gives Amazon an enormous and unparalleled ability to customize its offerings to specific shoppers and create a highly personalized experience.

It is unlikely that Amazon will drop this ball. And that’s the real Eye-Opener.
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