Amazon Prime: The Prime Way to Get Shoppers to Spend More
If you’re a frequent Amazon (NASDAQ:AMZN) shopper, there’s a good chance you have an Amazon Prime subscription. Many Amazon consumers are lured in by the membership’s free two-day shipping, free streaming of 150,000-plus movies and TV episodes, and free e-book borrowing. The Seattle-based company said last week that it enjoyed a “record-setting holiday season.”
Amazon has been able to convince many of its shoppers that its $79 annual program is logical for those who spend a lot of time on the company’s website, but after reviewing recent data, it is unclear whether the subscription is actually more beneficial to shoppers or just more lucrative for Amazon.
According to CNBC, American customers spend an average of $968 on Amazon regularly, and the highest-spending shoppers are those who are Amazon Prime members, Kindle device owners, or Amazon Visa cardholders. Amazon Prime members spend an average of $1,340 on the site, while Kindle owners spend $1,233, and Amazon Visa cardholders lay out $1,529. Customers not in any of those categories spend an average of $529.
R.J. Hottovy, director of consumer equity research at Morningstar, said to CNBC that Amazon Prime consumers tend to spend more than their regular Amazon counterparts because they are lured in by the promise of fast, free delivery, and these people want to buy more so they feel like they’re taking advantage of the program.