It may seem petty to pay attention to a single company’s single-day effort to goose revenue when Chinese stocks are flailing and the Greek economy is falling deeper into a depression. But when the company is Amazon and the focus is on the modern Internet shopper, the strategy could have ripple effects far and wide.
Amazon is turning 20 years old in the week ahead. On Wednesday, it will hold Prime Day. It is Amazon’s mid-summer answer to Black Friday, the annual post-Thanksgiving orgy of retail consumerism. Amazon promises “more deals than Black Friday” for customers of its $99 annual membership fee Prime service.
There are 40 million of those customers and, no doubt, millions more will wind up joining after Wednesday’s stunt. It’s a shrewd strategy considering Prime customers buy twice as often as regular Amazon customers and spend 40 percent more when they do, according to Internet analytics firm comScore. More than 9 out of 10 renew their subscriptions each year as Amazon expands its Prime offerings to include streaming movies, TV shows and music.
Amazon’s effort may be a one-time affair. Or maybe it’s the company’s hope to start Christmas shopping in July. Either way shareholders have not been scared off by the company’s selling techniques that put product volume over profit. Amazon’s stock is close to its all-time high.
What Amazon lacks in profits, it more than makes up in influence. It is a driving force reshaping American retailing, music and media. Even more powerful, Amazon is driving new consumer expectations and experiences that anyone delivering a service or product has to abide by.
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.