The Diffusion of Amazon Prime

Halloween is right around the corner and many people, especially college students, are looking for inexpensive costumes. I am one of those students. I had a hard time finding an inexpensive costume at a Party/Halloween store, which in my opinion, most Party/Halloween stores make costumes way too expensive. I checked amazon Prime to see what costumes were available and there were so many options that cost so much less. I ended up ordering a costume offline and received it in 2-days. Amazon Prime has diffused fast and has millions of members all over the world and I am one of them.

Amazon Prime was released in February 2005 and continues to be a hit with members (Our Innovations: Amazon Prime.1996). According to Kaplan (2011) Prime is available in the United States, France, Germany, Great Britain, and Japan. It is one of the most popular subscription services and in 2014 Prime memberships increased by 50% globally (Our Innovations: Amazon Prime.1996). Amazon prime diffused very fast, in 2009 only four years after it was released, it had 2 million members (Kaplan, 2011). Kaplan (2011) states that in 2011 it had five million members out of a total of 121 million amazon customers, which means the rate of Prime members was increasing by more than 20% over the years. The image below retrieved from Kaplan (2011), shows how sales have been consistently increasing over the last 7 quarters.

kaplan-graph

The net sales for amazon Prime in 2014 was $88.99 billion and today amazon Prime now has 54 million users (Craig Smith, 2016).  Memberships have been peaking so much over the last year that “members are spending more on average than regular costumers” (Smith, 2015). Amazon Prime is not only a source for online shopping but it also offers, video streaming (including TV episodes), music streaming, e-books, audio series, and unlimited photo storage (Our Innovations: Amazon Prime.1996). There are so many reasons to have a Prime membership, I use mine constantly. For example, I will buy books for school I need off Prime and I also have downloaded movies and TV shows from Prime as well.

Adam Dachis (2013) who is an amazon Prime user states many people use Prime to get items sent to them faster without having to spend extra money in the shipping process. Dachis (2013) claims he has benefited from this service because he buys more than 10 items from Prime over the year. Smith (2015) states that older people are attracted more so to amazon Prime than younger people. He claims that older shoppers are “more loyal to the service then the younger crowd” (Smith, 2015). Many people between the ages 40 and 60 have Prime accounts because it is simpler to shop on Prime and get items delivered to their door then walk from store to store (Smith, 2015). The image below was received from Smith (2015) and it shows the age groups of the people who are Prime members.

smith-graph

Teitelman (2014) claims that amazon Prime has reached its critical mass, because it is the primary way for the majority of internet users to shop and listen to music. This technology offers many popular services people can use under one membership. Prime celebrated its ten-year anniversary last year by lowering prices for their members and shared this with “tens of millions of prime members around the world” (Our Innovations: Amazon Prime.1996). This technology has not just been accepted by the United States, but also by many different people around the world and this technology makes it easier for people to connect globally when writing reviews about items.

Amazon Prime is so successful because of the many deals that come along it. It is unlike any other consumer technology. Prime has made “2-day shipping possible and guaranteed” (Our Innovations: Amazon Prime.1996). Prime also (as mentioned above) has many other aspects to use and take advantage of, other than just to shop. One review amazon Prime received said “In the past six weeks my husband and I have made an embarrassing number of orders through Amazon Prime Now. It’s cheap, easy, and insanely fast” (Our Innovations: Amazon Prime.1996). This technology makes watching movies and shopping easier than ever before because it is all through your one membership, there is no need to memorize multiple accounts or passwords and that is a huge reason why this technology is so successful.

References

Amazon. (1996-2015). OUR INNOVATIONS: Amazon Prime. Retrieved September 19, 2016, from Amazon.com, https://www.amazon.com/p/feature/zh395rdnqt6b8ea

Dachis, A. (2013, August 6). Is Amazon Prime Worth It? Retrieved from  http://lifehacker.com/is-amazon-prime-worth-it-1038496234

Kaplan, M. (2011, September 16). Amazon Prime: 5 Million Members, 20 Percent Growth | Practical Ecommerce. Retrieved from http://www.practicalecommerce.com/articles/3043-Amazon-Prime-5-Million-Members-20-Percent-Growth

Smith, C. (2016, August 30). 120 Amazon Statistics and Facts (July 2016) (AMZN). Retrieved from http://expandedramblings.com/index.php/amazon-statistics/

Smith, D. (2015, January 16). Older People Are More Loyal to Amazon Prime. Retrieved from http://www.businessinsider.com/amazon-prime-demographics-chart-2015-1

Teitelman, B. (2014, June 12). Now Amazon has a music streaming service too | Metal Insider.  Retrieved from http://www.metalinsider.net/streaming-music/now-amazon-has-a-music-streaming-service-too

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