Amazon.com may be finally facing a worthy adversary in the retail arena: itself. The online giant recently announced its intent to increase the $79 annual fee on its popular Prime membership by $20 to $40, but our consumer insights suggest that its shoppers aren’t buying into plan, signaling what could be a dangerous move in an already hyper-competitive retail environment where loyalty is hard to win and easy to lose. Continue reading
While it remains to be seen how (or if) the 2013 Marketplace Fairness Act will impact sales for Amazon.com, what we do know is that the online leader seems to have a loyal constituency in its Amazon Prime Membership. For a $79 yearly fee, this group of elite shoppers receives free two-day shipping on eligible items and access to Amazon’s Instant Video streaming service as well as the Kindle Lending Library – and CEO Jeff Bezos is keeping the perks coming.
The risk to competitors is fairly obvious; this shopper coalition gives Amazon a top notch spot in their retailer consideration sets. Our intel tells us that Prime members’ propensity to shop Amazon.com is about double that of the general population for several major retail categories, including Women’s and Men’s Apparel, Shoes, Electronics, Sporting Goods, Linens and Bedding, and Health/Beauty Care. Of course, this doesn’t mean that Prime members are shopping Amazon exclusively or that they shun more traditional brick and mortar retailers. So let’s take a look at who these shoppers are, why they are so valuable to Amazon, and which retailers may be facing a Prime threat. Continue reading