Amazon just released results of their two-day Prime Day, and those results appear to be really good. In fact, Amazon says it was the largest shopping event in the company's history, exceeding sales totals for last year's Black Friday and Cyber Monday combined.
Even though the company doesn't release total dollar amount figures for Prime Day, there's an even more important number that shows why Prime is such a winning strategy.
That's the number of products purchased by Prime members during the two-day event. Amazon says it has roughly 100 million of those members and it appears that collectively they bought a lot of stuff.
That means a few things, all of them good.
First, that's a lot of people paying $119 per year for a collection of benefits. That's almost $12 billion in revenue from the annual subscription fee alone. Obviously, all of those benefits of Prime cost the company real money, which explains why the company is so invested in its own distribution network--delivering all of those Prime Day packages isn't cheap.
Still, that membership fee is incremental revenue, much of which ends up going straight to Amazon's bottom line.
Prime members are engaged.
But more important, it looks like a lot of those members are engaged and making multiple purchases. A little back-of-the-napkin math says the average Prime member purchased 1.75 items during the Prime Day sale. I'm a Prime member and I didn't order anything, which only means the rest of you are actually ordering more than that.
That's good for Amazon. It means that even though the company had a few technical difficulties, for the second year in a row, Prime members are loyal and engaged. They buy things.
In fact, Prime members spend more than double the average Amazon customer--as much as $1400--and they stick around, according to reports.
That's the ultimate double play--get your best customers to pay you for the benefit of buying more stuff. A lot of stuff: 175 million Instant Pots, PlayStations, electric toothbrushes, Roombas, and more. That's what Amazon says were some of the best-selling items over the past two days. Despite the discounts, those aren't exactly free items. They add up to a lot of sales revenue over two days.
In fact, advance estimates were that the company could generate $5 to $6 billion over the course of the sale. Based on Amazon's statement, I suspect it's closer to the high end.
Make your business sticky.
I don't know what your business is, but there's a lesson here: make your business sticky. It's not even that profound. Just make it easy for your best customers to keep being customers, and don't give them any reason to go anywhere else.
Amazon does that by creating a membership that provides a group of "benefits," but really it helps create a stickiness that drives customers to keep buying more and more. Free shipping and two-day sales aren't the only way to do this, but in Amazon's case they work.
For you, it might be some other kind of loyalty program or exclusive product offerings for your top customers. It might even be a subscription program of your own. Either way, making your business sticky isn't just an Amazon thing--it's a smart play for your business.