Amazon raised the rate of prime membership. Has that slowed growth?
Story by Chart R
Last week, Bloomberg reported that Amazon was in talks with wireless carriers such as Dish Network, Verizon, and T-Mobile, about offering a nationwide mobile phone service to Prime subscribers for as little as $10 a month, or possibly even free.
Some of the companies have since denied any talks with Amazon, but even if a deal doesn't materialize, the fact remains that Amazon is still keen to stuff more benefits into Prime to attract — or more importantly retain — its customer base.
The latest Prime offering is already a fairly confusing combination of express delivery, streaming, reading, shopping, photo storage and (some) music. While the majority of people subscribe to Prime for the speedy delivery, the bundle has been a powerful draw for consumers — with US subscribers surging from roughly 27m in 2013 to a staggering 170m just eight years later.
However, after raising the yearly membership fee from $119 to $139 last year, Prime's growth has slowed, even going into reverse per the latest estimates from CIRP. In the meantime, Walmart has also emerged as a formidable competitor with its $98-a-year Walmart+ subscription, offering similar benefits like free delivery on orders over $35 and early access to sales.
Land and expand
The expectation is now for Amazon to expand its Prime offering by introducing new perks and privileges (some creative ideas here from The Verge).
The potential venture into the mobile industry is not Amazon's first attempt. In 2014 Amazon launched the Fire Phone… which lived up to its name, crashing and burning against stiff competition, being discontinued within a year. Despite this, the tech giant has shown a willingness to invest and sustain losses in the relentless pursuit of scale. One more reason not to cancel your Prime membership is probably enough for the execs at Amazon HQ to consider any idea.