It’s been a historic year for Amazon and that trend continued with Amazon Cyber Monday 2018.
After Amazon’s highly successful Prime premium loyalty program eclipsed 100 million members in April, the company registered a record-setting Prime Day in July when shoppers spent an estimated $4.2 billion during the 36-hour shopping extravaganza.
Records Set on Black Friday, Cyber Monday
While officials for the Seattle-based online behemoth didn’t disclose sales figures, they said that customers ordered more than 180 million items during the five days from Thanksgiving through Cyber Monday, with the latter being its single biggest shopping day in company history.
Cold weather in the Northeast and rain and snow on the West Coast may have caused more consumers to shop online on Cyber Monday.
Another key reason for Amazon’s historic success over the long Thanksgiving weekend could be that it offered free holiday shipping for everyone. Normally, non-Prime members would have to spend $25 or more to receive free shipping, during this holiday season everyone will get free shipping from Amazon, member or not.
In a company statement, Amazon officials said that their best-selling items on Cyber Monday included the Echo Dot, AncestryDNA’s ethnicity testing kit and the Bose QuietComfort 25 Acoustic Noise Canceling Headphones for Apple devices. Other popular items included Michelle Obama’s memoir “Becoming,” the Jenga game, and Instant Pots.
“Black Friday and Cyber Monday continue to break records on Amazon year over year, which tells us that customers love shopping for deals to kick off the holiday shopping season,” Jeff Wilke, CEO Worldwide Consumer, said in the Amazon statement.
In its third-quarter earnings report, Amazon indicated that it expected revenue for the holiday season to range between $66.5 billion and $72.5 billion.
The Power of Prime
The power of Amazon’s Prime loyalty program came into play on Prime Day in July and likely played a role in the company’s historic performance over the Thanksgiving weekend.
Prime Day lured new Prime members in search of deals and, while Amazon did not provide hard numbers, the online retailer reported that more new members signed up on July 16 than any single day in Amazon history.
The power of Prime includes the company’s keen ability to continually expand its loyal member base. The Prime ecosystem continues to grow and, most certainly, did over the Thanksgiving weekend.
Prime members have always been Amazon’s most loyal customers. They show it throughout the year and, certainly, on days such as Prime Day, Black Friday, and Cyber Monday.
A paid loyalty program, like Prime, simply gets a retailer’s best customers to engage more often and spend more when they do. Amazon has always been about being innovative, providing great customer service, and catering to its loyal customers.
Prime members offer Amazon better customer data, along with increased engagement and loyalty levels.
Just like Prime Day is like Christmas in July for Prime members, Black Friday and Cyber Monday are like Christmas in November.
Why Prime Members Are More Valuable to Amazon
Prime members have proven to be more valuable to Amazon.
Consider these statistics: The average Prime members spends $2,500 per year at Amazon, which is nearly five times more than a non-Prime member. Also, 91 percent of first-year members renew for a second year.
The fact that Amazon officials listen to and understand their customers leads to desired benefits that Prime members are willing to pay for annually.
From free two-day shipping to video and music, Prime provides an enviable value proposition that goes a long way toward member retention.
Instead of requiring members to spend money over time to receive benefits somewhere down the road, a premium loyalty program allows members to pay a recurring fee for benefits they can use right away.
As a result, Prime creates an “instant culture” in which members can engage with the program 24 hours a day, 365 days a year. A premium loyalty program like Prime embodies instant gratification, which is more important now than ever before for retailers.
What’s more, Prime members have deeper customer engagement, higher order frequency, and higher AOV.
Creating a seamless customer experience, based on mutually rewarding customer loyalty, is why brands find success and strengthen their consumer relationships.
For many now the premium loyalty model is a shining example of how brands are rethinking customer loyalty by creating programs tailored to their specific needs, supporting their brand messaging, impacting the customer experience, and delivering results.
Prime Redefines Loyalty
Prime redefines loyalty in that customers want to become members, stay engaged, and advocate for a membership that make their lives better.
This shift toward premium loyalty programs is real because consumers understand the simplicity and can easily see the attached value proposition.
More than 100 million Prime members have demonstrated their ongoing commitment to Amazon.
Loyalty is a two-way street and being committed to its customers has paid off richly for Amazon.