Amazon Prime Strategy: How Subscription Giant Chooses Benefits

In 2005, Amazon Prime started out by offering unlimited two-day shipping on lots of items, like books, DVDs, and a few electronics. People weren’t sure about it at first, thinking it might cost too much, but turns out, it was a hit! Now, more than 200 million folks worldwide pay for Prime, bringing Amazon a whopping $44 billion in 2024. Fast delivery is still the star of the show, with Amazon delivering over 9 billion items in 2024.

Now, Prime is way more than just quick shipping – it’s a whole package deal. For about $14.99 a month, you get all kinds of perks, like free Grubhub+ access, fuel discounts, live sports, and streaming entertainment. Each benefit is meant to make your life a bit easier, according to Moz Thomas, the director of worldwide Amazon Prime benefits, pricing, and constructs.

So, how does Amazon pick what goes into the Prime package? Well, they do a lot of snooping around to see what people like. They run surveys, look at usage data, and keep an eye on what’s trending in the retail world. They want to know if customers will love a perk, if it’s good for business, and if it enhances the experience.

One way Amazon figures out what to add is by asking us directly. They see what we use the most, like Prime Video, and then use that info to give us even more cool stuff to enjoy. And sometimes, Amazon throws in surprises, like Alexa+, an AI version of their voice-activated assistant that Prime members can get for free.

Speaking of surprises, Amazon has been investing big in AI, spending tons of cash to make sure they’re ahead of the game. This year, they launched Alexa+ as a Prime benefit, showing just how important AI is becoming. And it’s not just AI – Amazon’s been making moves in live sports, too, like grabbing streaming rights for NBA, NFL’s “Thursday Night Football,” NASCAR, and the WNBA. These deals aren’t cheap, but Amazon sees it as a way to boost overall worth for Prime members.

Even though Amazon hasn’t changed the price of Prime in the U.S. since 2022, they’re more about value than cost. They want Prime to be so awesome that you’d be silly not to have it. They keep track of how much value you’re getting from the perks, how much you’re actually using them, and if you feel like you’re getting your money’s worth. And if a perk isn’t a hit, like the “try before you buy” clothing service they axed in January, they’ll toss it to focus on what really matters.

So, whether it’s fast shipping, exclusive games, or live sports, Amazon Prime keeps growing and evolving to make your membership more valuable. And who knows what the next cool perk will be?