|EcommerceBytes-NewsFlash, Number 3823 - April 19, 2016 - ISSN 1539-5065 1 of 4|
The Amazon Prime membership program is incredibly important to the company, and this week, Amazon made a bold move by making it available to customers on a monthly pay-as-you-go plan. Previously it was available only as an annual plan (with a 30-day free trial available to new members).
The company also announced it is offering a de-bundled monthly plan for those who wish only to subscribe to Prime Video, without getting any of the free and fast shipping benefits.
That means shoppers who find they only benefit from Amazon Prime free shipping during the holidays or during certain other times of the year can now choose to pay $10.99/month rather than paying $99/year, which is the equivalent of $8.25/month.
And those who wish only to view Prime Video can sign up for $8.99/month - an option for those who want to watch (or binge-watch) certain programs available exclusively through Amazon.
Amazon has said in the past that the biggest return on investment for Prime is that members buy more, "including and especially physical products." It has also noted that Amazon Prime has great retention - and said those who stream video content retain at a higher rate. The video content that Amazon is spending on is helping because those Prime customers buy consumables, clothing, shoes, electronics, and media items, the company said last year.
Amazon spokesperson Julie Law told EcommerceBytes on Monday it does not publish the number of Prime members, but said there are tens of millions in the US alone. We asked if Amazon would be holding another Prime Day shopping event this year and, if so, whether customers with a one-month Prime subscription would be able to participate.
She said Prime Day is happening again this year, but the company has not yet shared the date. And yes, "all members can participate, even if they are in the 30-day free trial window," she said.
We asked Michael Iannucci of Clarus Commerce about Monday's announcement. Clarus Commerce operates a similar program at FreeShipping.com where for $12.97/month, shoppers can receive free shipping (and free returns) on purchases from over 1,000 sites including major retailers.
Iannucci said the full-benefits option will allow Amazon to signup consumers during the holidays and other high-purchase periods. "Even short-term memberships allow Amazon to monitor their behavior, communicate with them, and customize offers to them, all of which give Amazon a better chance to retain them long-term," he said. The new monthly options are intended to appeal to people not interested in year-round access to Prime's benefits.
Like everything else Amazon does, he said, "the monthly memberships will likely draw customers away from other retailers - or at least increase Third Party Seller purchases at the expense of direct-from-retailer purchases."
The bottom line: "Amazon is trying to expand Prime's appeal by offering consumers an abridged version of it and more ways to pay for it," Iannucci said.
You can learn more about the Amazon Prime membership plans on the Amazon website.
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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