Prime: Amazon's customer loyalty program pays off
Amazon is continuously expanding its offerings for Prime members: Since September 2016, Prime members in London can order meal deliveries, for example, and in the United States, members of the paid subscription program now have access to books and magazines at no additional cost. The company keeps adding more arguments in favor of signing up for its Prime service.
This is no coincidence, as a study by investment firm Cowen and Company illustrates. These analysts estimate that Amazon has 49 million Prime customers in the U.S. alone. And they count not only in terms of the membership fees they pay, but also spend significantly more with the online retailer than non-Prime customers. Cowen and Company estimates the total value of U.S. Prime customers at USD 143 billion.
One analysis already concluded back in 2015 that fewer than one percent of Prime customers consider shopping at another online retailer during any given online session. A study by Deutsche Bank estimated that 60 percent of all Amazon purchases are made by Prime members. Who make up only 20 percent of the total customer base.
So it is in Amazon's interest to tempt as many people as possible to sign up for a Prime subscription. One recent sign of the eCommerce giant's eagerness came in February 2016, when Amazon in Germany began selling certain products exclusively to Prime members.