Tuesday, April 29, 2014

Sounds like a recipe for success to me . . .

I note that many people seem to have developed what some call 'Amazon Derangement Syndrome' - knee-jerk opposition to anything Amazon.com does, says, introduces, etc.  I've run into this in the publishing world, where authors like myself can now bring out our own work and reap the benefits and rewards, bypassing the 'gatekeepers' of publishing houses that haven't been able to keep up with technological and social change.  Needless to say, I'm an unabashed fan of Amazon.

One begins to get an inkling of how successful the company has been at building, not just its customer base, but also its 'fan base' (if I may call it that) from an article at the Huffington Post.

Consumer Intelligence Research Partners (CIRP) released analysis of Amazon Prime members and Kindle device owners from Amazon, Inc. This analysis indicates that these programs have become significant drivers of Amazon sales, even in light of the recent Amazon Prime price increase, and significant competition in the tablet computing market.

42% of buyers [are] Amazon Prime members and 48% have a Kindle Fire, Kindle e-Reader, or both (see charts).

Based on the survey data, we estimate that as of March 31, 2014 Amazon Prime [h]as 27.8 million members in the US, and that 31.3 million Kindle Fire and Kindle e-reader devices are in consumers' hands. Both serve as superb affinity programs for Amazon, as Kindle owners spend 30% more, and Prime members spend twice as much, as the rest of Amazon's customers.

There's more at the link.  Interesting reading, particularly the charts.

This analysis reveals a couple of interesting aspects about customer loyalty.  For a start, Amazon is now charging $99 per year for Prime membership.  If the survey's figures are correct, that means Amazon's generating annual revenue of two and three-quarter billion dollars from its Prime customers even before any of them buy anything!  That's a substantial amount by anyone's standards - yet Prime customers don't mind paying for their membership, and continue to do so in ever-increasing numbers.  (I find the benefit of free two-day shipping justifies my Prime membership many times over, given how much I spend on Amazon.com each year.  The free streaming videos and other benefits aren't of much interest to me, but I know others value them.)

The second is how ubiquitous Amazon.com has become in the consumer marketplace.  I know that when I want to buy almost anything, one of the first things I'll do is check whether it's available on Amazon.  I do my initial research more widely than that, and see where the best deal is to be had.  However, once I'm sure that a given product is on Amazon at a competitive price, and can be delivered to me in two days, why would I want to look anywhere else?  I simply re-order it there as often as I need it.  I don't have to take time out of my busy day to run errands, spend money on gas or parking, cope with traffic, or anything like that.  I know millions of other people do as I do for the same reasons.

It's no wonder that malls are struggling to keep their doors open, and mainstream retailers are battling to cope with competition from online vendors.



Rev. Paul said...

While the retail shopping experience in Anchorage is much, much improved from even a decade ago (with all the new retail stores opening here), the selection & pricing at Amazon makes spending hours at the store passe'. Amazon is our friend!

emdfl said...

What is this "Amazon" that you speak of? Certainly, at least from the way you talk, not the river...

Jon said...

Just a note - I don't have Amazon Prime, yet I still get free shipping on all my items with standard shipping, and my orders often arrive in two days, anyway. I think UPS just expedites ALL Amazon packages to make their biggest customer happy.