Amazon Prime is a fee-based membership program that provides customers with a wide range of exclusive offers. Benefits include free premium delivery, exclusive deals and discounts, and subscriber-only digital content that Prime users can access for a monthly or annual fee. Since the service was first introduced to domestic shoppers in 2005, it has expanded to 16 other countries and raised the global number of Prime members to 150 million in 2019. In the United States, industry sources estimated a subscriber count of 124 million in 2019. By the end of that year, roughly 65 percent of all Amazon shoppers were Prime members, reflecting the service’s strong appeal to platform users. Seeing that Prime has significantly raised the bar for online shopping in terms of convenience and comfort, subscriptions are forecast to steadily increase in the future.
For the e-commerce giant, this growing number of Prime users is paying off not only in terms of membership fees but also in purchasing volume. In 2018, Prime members placed almost twice as many orders as non-Prime customers, while their average annual spending of 1,400 U.S. dollars also significantly surpassed that of free account holders. Every year, spending is skyrocketing during the 48-hours of Prime Day, an online shopping event that promotes a wide range of deals and flash sales to Prime users. Launched in 2015 to celebrate the company’s 20th anniversary, the event has now become a household name for bargain hunters from around the world who generated sales of over 7.16 billion U.S. dollars on Prime Day 2019.
Apart from the perks of low prices and free shipping, one of the most attractive features of Amazon Prime are its streaming options. Amazon Prime Video, the company’s video-on-demand service, offers a large selection of films and television shows, which Prime members can either watch for free, rent, or purchase. In 2018, Prime Video had 26 million subscribers in the U.S., trailing only after Hulu and Netflix. To compete with these players and make its streaming service more attractive to internet users, Amazon started producing its own original content, for which Amazon Studios received 47 Emmy nominations in 2019. The platform has seen particularly high audience growth in early 2020 as a result of the coronavirus (COVID-19) pandemic. In the United States, self-isolation practices led to soaring usage and viewer numbers across SVoD channels, with Prime Video recording a 35 percent audience surge in March.
One other product category that has seen unprecedented growth in demand due to COVID-19 is groceries. As U.S. shoppers are minimizing their trips to the supermarket, they increasingly turn to online marketplaces like Amazon to purchase food and beverages. In April 2020, food and drinks were among the three most popular product categories among Prime members in the United States. But apart from pantry staples and nonperishables that shoppers are stacking up on, customers are also frequenting the platform to buy fresh produce. Amazon Fresh, the company’s Prime-exclusive online grocery delivery and pickup service, offers members in select regions a variety of food items ranging from fresh Whole Foods Market strawberries to frozen meat that they can get delivered to their door, even unattended.