Will Amazon.com, Inc. (NASDAQ:AMZN) Survive Competition Despite The Increased Prime Service Membership


Despite the growing number of its Prime members, Amazon.com, Inc. (NASDAQ:AMZN) is still scouting for new members, something that was very evident during its Prime Day sale. Estimates from Consumer Intelligence Research Partners shows that Amazon has 63 million Prime members having added 19 million during its last year’s inaugural event that was celebrating its 20th birthday.

New subscriptions were in the tune of 9% in a span of three months that ended June 30. According to Mike Levin, partner and co-founder of CIRP, the Prime service has improved from what it two years ago was equating a growth of 43% of the 63 million members.

The secret behind this achievement by Amazon

The e-Commerce giant has been up and around with various strategies that have finally bore fruits. It began with the offering of discounts during its Prime Day 2015 which was characterized by an array of bargains and lowered prices.

Josh Lowitz, partner and co-founder of CIRP explains that the company continued with aggressive promotion of its services throughout the year which attracted new membership sign ups. It also created an avenue of monthly Prime subscription of $10.99 for interested shoppers who could not commit to a full year of membership that would cost them $99. The new Avenue hit a 22% registration.

There is an upcoming second annual Prime Day that Amazon says will be bigger and better. There will be new deals that are expected to woo new potential members.

There is a challenge even as Amazon Beefs up its membership

Amazon is having very healthy growth with its Prime membership but not without challenges. Retailers from eBay Inc (NASDAQ:EBAY) have also begun promoting their deals which apparently do not need any membership. On the other hand, Wal-Mart Stores, Inc. (NYSE:WMT), which is the world’s largest retailer is abolishing its $50 free shipping minimum. Compare to Amazon’s annual membership cost of $99 Wal-mart’s membership is at $49.

Clearly, there is a real battle between the online retailers. The big question is who will survive the competition?

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