According to this study, they have hit 90 MILLION US members. That means that almost 30% of the total US population is an Amazon Prime member. If 63% of Amazon customers are Prime members then that puts Amazon’s total customer base at $142M or 43% of the US population. To put that into perspective, most retailers are happy if they can even achieve double-digit penetration rates for a certain category or market segment…let alone double-digits in the entire US population.
Want to know what the crazy thing really is though? Prime is essentially just a membership rewards program, nothing new. Plenty of retailers have come out with rewards programs of their own to increase loyalty and maximize customer LTV, but most of them are over complicated and filled with shit you don’t want.
Take the Best Buy rewards program below for instance…..so I need to spend $3,500 a year and then I get free two-day shipping, Geek Squad (which is free for everyone btw so you know it must be super valuable) and a $5 rewards certificate for every $83 I spend?….. I’ll take option B and take unlimited Prime 2 day shipping for $100 a year. I realize that it’s expensive, but retailers just refuse to bite the bullet and offer free two-day shipping on everything. It’s like my dad driving anywhere. We know the best route to take, but he always has to try out some new ridiculous shortcut that ultimately ends up being less effective.
The study goes on to say that “Prime shoppers continue to spend on average about $1,300 per year, compared to about $700 per year for non-member customers.” And I’m honestly shocked it’s not higher. I legit use Prime for EVERYTHING. Ran out of toothpaste? Prime! Sitting on the throne and realize that we are running a bit low on toilet paper? Prime! Had a couple beers and decide that I really REALLY need that hot new Fire Stick? Prime! JK I’m Apple TV all the way.
With most retailers operating as publically traded companies, beholden to their shareholders I just don’t see how they make the pivot to compete with Prime while also remaining profitable. If you have extra cash, buy Amazon stock, it’s not going anywhere, but up!