- Amazon Prime members still overwhelmingly cite free two-day shipping as the most important perk of the membership, according to a new survey by The Diffusion Group.
- 79% of the Prime members who were surveyed cited the perk as most important. The second-highest was Prime Video, with 11% saying it’s the biggest perk of Prime.
- Prime is one of the biggest drivers of growth at Amazon, as members tend to spend more money, more often on the website.
AmazonPrime’s free two-day shipping is still first in most members’ hearts.
According to a new survey by The Diffusion Group, 79% of Prime members said that the free two-day shipping perk is the “primary reason” they subscribe to the $US119-a-year – or $US12.99-a-month – service.
That’s by far the top reason cited by the 1,160 Prime members who were surveyed. The next primary reason was Prime Video, Amazon’s Netflix-like streaming service that is included with Prime membership.
The remaining 10% of customers cite features like Prime Music, Photos, Reading, Twitch, or something else entirely as the No. 1 reason they pay for a Prime membership.
“Prime is first and foremost about developing more and broader retail relationships, and free shipping is key to that mission,” Michael Greeson, president and director of research at TDG, said in a statement. “That is where the real value of Prime lies.”
Amazon has been evolving Prime’s classic two-day shipping guarantee and offering additional perks like one-day and same-day shipping.
That value is both for the customer and for Amazon itself, as Amazon sees customers subscribed to Prime spend more and shop more often on the site.
The value of Prime has risen steadily as Amazon has added more benefits to the program over the years. A recent JP Morgan analysis estimated that the service is actually worth $US785 a year when everything it offers is counted together. That’s six-and-a-half times the actual cost of an annual Prime subscription, even with the recent price increase. It’s also an increase of about 12% from what JP Morgan estimated Prime to be worth last year, when its analysts said membership was worth $US700 a year.
“Prime delivers such massive scale and features that we believe it would be very difficult for any company to replicate and compete against, and Amazon continues to expand and add more value to Prime by adding new benefits and growing existing offerings,” the analysts wrote.
That means that even if a customer does not take advantage of everything Prime membership has to offer, there’s still the perception that they’re getting a good value for their money.
As Amazon adds services, it wants to make sure that when customers take a second look at whether they’re really getting value for their money after the price increase, they’re satisfied with their membership and will renew another year.
New products and services are one way Amazon does this, but it must take care that its current service standards don’t slip in the meantime. Business Insider has spoken with and heard from many customers who claimed that Prime shipping standards have slipped . That may all be a misunderstanding , though.
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