“Amazon Turns Prime Day Into Prime Week,” is The Wall Street Journal headline. Amazon (NASDAQ: AMZN) has turned its most successful marketing tool into a juggernaut. Why not not make it bigger, and perhaps better. Prime members are more likely to buy items at Amazon than non-Prime members according to a number of sources. Prime Day allows Amazon to balloon Prime member numbers. Today, Prime members total about 220 million.
“Prime Day Starts Now” it says at the top of Amazon.com. Immediately, there is a chance to sign for Prime. Then, there is a very long list of benefits for Prime members which stretches from “50% off” for some items. “Fire TVs with Alexa” are on sale for $69. Alexa is Amazon’s AI home assistant. However, the deal is only available for Prime members.
Prime members also get deals on Prime Video, which is the world’s largest competitor to Netflix (NASDAQ: NFLX). They also get free same day delivery on a number of items.
The base Prime membership annual fee is $139. If people want to sign up and pay monthly, the fee is $14.99. Prime Video is available for $8.99 a month. Amazon Prime Video has less churn than any other video service at 8% a year. Churn rates for competing services run as high as 20% a year. That points to Prime Video’s value.
Capital One Shopping Research reports that last year, Amazon brought in $14.2 billion over a 48 hour period. It is forecast that the four day event will bring in much more this year.
One of Amazon’s most successful businesses is selling advertising on its site. The Journal says over the course of the year, this total is $50 billion. The longer Prime Day period should help that rise.
To give a sense of the effect of Prime Day on Amazon’s revenue, North American revenue was $92 billion in the most recently reported quarter. Prime Day may be Amazon’s single best promotion. And, it just got longer by a factor of 2x.
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