Marketing success: The brilliance of Amazon Prime’s strategy

With the holidays fast approaching, shopping has become inevitable. I’ve never really enjoyed shopping, and I find myself incredibly busy with work in the lead-up to the holidays. Further, with my husband and I living in different parts of the country, most of our mutual gift-giving is moving online (not to mention I don’t have a car in DC!).

Now, I’ve always done a fair amount of online shopping – as an academic, I tend to buy a lot of books. But the way in which I shop online has changed, all due to the brilliant marketing strategy of Amazon Prime. And with the holiday spending spree upon us and the time and distance pressures, Amazon is reaping the benefits.

Last summer, I posted that Amazon was offering free one-year subscriptions for students for their Amazon Prime service. I had been interested in the service before – I had friends who swore by it – but $80 a year seemed like more than it was worth. I could bundle my products and wait a few extra days for super-saver shipping. But when it became free, I was eager to jump on board.

I quickly became enamored of the service. Amazon became not just my go-to site for online shopping, but practically my only stop. It was great for getting my out-of-town friends gifts. The free two-day shipping meant I was willing to pay a couple of dollars more for the product than I might elsewhere, just so I could have it in 2 days. And impulse buys increased when it was so easy to get – quickly – whatever caught my fancy. And now, the majority of our holiday gifts have been purchased through Amazon: they make it very easy to find a range of items and make it even easier for them to appear at our door – and with two day shipping, I still have days to get the shopping done!

This summer, when my Amazon Prime subscription was up, Amazon offered me a chance to renew for half-price: $40. I quickly jumped on it. The free one-year offer had me hooked – but only to an extent. If my membership had cost $80, it would have been a much harder decision.

I’m interested to see if they continue the brilliance of this marketing ploy. My bet: Amazon makes money off me having Prime, even without charging me for a subscription, based on my changed behavior and greater loyalty to Amazon. I’m definitely more willing to buy online when I know it’s made easy for me! They’re providing me a valuable service – one I’m willing to pay some money for. But they could easily lose this loyalty if they get greedy and try charging more than it seems worth. Will they ever charge me full price for Prime – and risk losing me (and probably countless others)? Or will they continue offering the service at a “discount” to keep me hooked? I argue the latter is the smarter move – and since I’ve been nothing but impressed with their marketing, that’s what I’m betting on.

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