Sneaky Ways Amazon Gets You To Spend Money

Summary

Amazon's retail success in 2018, with an estimated $232 billion in revenue, is attributed to its customer-centric strategies. The average customer spends $600 annually, while Prime members, who enjoy benefits like free expedited shipping, spend $1400. Amazon leverages data to personalize shopping experiences, encourages impulse buying with one-click ordering, and dynamically adjusts prices over 2.5 million times a day. Prime membership, with its additional perks, has over 100 million subscribers, reinforcing customer loyalty. Amazon's ecosystem, including devices like Alexa and Kindle, further integrates customers, with Kindle users spending even more. Despite Amazon's dominance, consumers are advised to consider other retailers for potentially better deals.

Takeaways

• 💰 Amazon earned an estimated $232 billion in retail commerce in 2018, largely due to its customer base.
• 🛒 The average Amazon customer spends about $600 a year, while Prime members spend $1,400 each.
• 🚚 Free shipping is a key incentive, with Amazon offering it for orders over $25, encouraging additional purchases to meet the threshold.
• 🔍 Amazon uses data collection and psychographics to personalize recommendations, such as 'frequently bought together' and 'customers who bought this also bought'.
• 🛍️ One-click ordering facilitates impulse purchases, contributing to higher spending by customers.
• 📉 Amazon frequently updates its product prices, with over 2.5 million price changes per day, to stay competitive.
• 🔝 Amazon Prime membership has over 100 million members, who spend an average of $1,400 a year, influenced by the convenience of expedited shipping.
• 💳 Amazon invests heavily in Prime, aiming to make one-day delivery the standard and promoting Prime through various strategies, including free trials and discounts.
• 🎉 Prime Day is a major shopping event that offers significant deals and drives spending, with 60% of Americans feeling pressured to buy quickly during this event.
• 📱 Amazon's ecosystem includes devices like Alexa and Kindle, which are often discounted to integrate customers further into the Amazon ecosystem, leading to higher spending.

Q & A

What was Amazon's estimated revenue from retail commerce in 2018?

Amazon earned an estimated $232 billion in retail commerce in 2018.

How much does the average Amazon customer spend on the site annually?

The average Amazon customer spends about $600 a year on the site.

What is the average annual spending of Amazon Prime members?

Amazon Prime members spend an average of $1,400 each year.

What is the minimum purchase amount required for free shipping on Amazon for non-Prime members?

Non-Prime members can qualify for free shipping if their order hits the $25 minimum.

How does Amazon encourage customers to add extra items to their orders to reach the free shipping minimum?

Amazon makes it easy to find extra items to add to orders by using sections like 'frequently bought together' and 'customers who bought this item also bought', which are generated from similar shopping profiles.

What is the purpose behind Amazon's one-click ordering feature?

One-click ordering is designed to facilitate impulse purchases, making it easier for customers to quickly buy items they see without browsing for better deals.

How often does Amazon update its product prices based on competitor prices and user data?

Amazon updates its product prices over 2.5 million times a day, which is a price change every 10 minutes for an average product listing.

How many Amazon Prime members are there, and what is the average annual spending of these members?

As of October 2018, there were over 100 million Amazon Prime members, each spending an average of $1,400 a year.

What is one of the main perks of Amazon Prime that encourages members to spend more?

One of the main perks of Amazon Prime is expedited shipping, which is free of charge and encourages members to spend more due to the convenience of faster delivery.

What is Prime Day and how does it influence Amazon's sales?

Prime Day is a July shopping event launched by Amazon in 2015, offering extensive price cuts and deals for a limited time. It is designed to increase sales by creating a sense of urgency and exclusivity for Prime members.

How does Amazon promote its Prime program to potential members?

Amazon promotes its Prime program through free trials, discounts on devices, and constant promotion on its website, aiming to integrate as many people as possible into the Amazon ecosystem.

What is the average annual spending of Kindle users, and how does this compare to Prime members?

Kindle users spend an average of $1,450 per year, which is more than the average spending of Prime members.

What advice is given to Amazon customers regarding finding the best prices?

The advice given is that Amazon is not always the best price, and customers should consider looking at other online companies like Walmart and Target, which are enhancing their online operations and can almost match Amazon's offerings.