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Amazon’s prices and Prime power the e-commerce giant’s magnetic pull on shoppers

March 7, 2017 02:30 PM
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Amazon.com Inc.’s Prime program works. 

Shoppers cite the $99 annual membership program as the main reason they buy from Amazon, according to a Feb. 17-22 survey of 1,000 Amazon shoppers. E-commerce technology provider Branding Brand conducted the survey which polled consumers who make the majority of purchases for their households. 31% of shoppers say their Prime memberships are the top reason they shop at the web giant, followed 29% who list low prices as the main reason. Of those surveyed, 58% were Amazon Prime members. 

Amazon Prime offers free two-day-or-faster shipping, streaming video and music, online photo storage and early access to select shopping deals, among other perks. Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide. Roughly 45% of U.S. consumers, or about 49.5 million consumers, live in a household that has a membership to Amazon Prime, according to an October estimate from investment banking firm Cowen & Co.

66% of Amazon shoppers, however, say they would buy from other retailers if they offered lower prices, 60% would buy somewhere else if other retailers offered free two-day shipping and 37% say they would switch retailers for loyalty rewards.

What’s more, 37% of non-Prime customers surveyed think Wal-Mart Stores Inc. (No. 4 in the Top 500) is cheaper than Amazon. Plus, 45% of non-Prime customers say the main reason they buy on Amazon is to find lower prices.

Branding Brand’s data mirrors a recent consumer study by digital marketing agency CPC Strategy, which also finds that price and shipping are the top reasons shoppers buy from Amazon. 53.5% say they sometimes or always check prices elsewhere, while 18.2% say they only check Amazon’s prices before deciding to buy, according to CPC Strategy, which in December surveyed 1,500 U.S. shoppers ages 18 and older.

Amazon’s mobile app and mobile website are also popular with shoppers, as 60% of Amazon shoppers say they have bought something with the retailer using their mobile device, according to the Branding Brand study. Only 1% of consumers say they use Amazon Dash Buttons or digital assistant Alexa to shop. Dash buttons are key fob-like Wi-Fi-enabled buttons that Prime customers link to their Amazon accounts to automatically reorder specific products by pushing the button. Alexa is the name of the software that powers Amazon’s voice-activated smart-home device Echo. 

 

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