Love Amazon or hate it, you have to admit: The company is really effective at getting people to buy things.
In recent decades, the e-commerce giant has ridden an easy-to-use platform, flashy deals and deeply discounted products to a $1.6 trillion dollar valuation. And Amazon Prime, which originally launched in 2005, plays a large role.
Prime’s monthly fee of $12.99 promises two-day and same-day shipping on most of its products, giving it a competitive edge over other online retailers like Walmart and Target. And it’s hugely popular: The platform has an estimated 200 million subscribers, including 150 million in the U.S., according to market research firm Consumer Intelligence Research Partners.
“It’s just so quick and easy to have access to and purchase your products and goods,” Shannese Charles, 24, a freelance journalist who uses Amazon Prime frequently, tells CNBC Make It. “I’m trying to contain myself from being on Amazon Prime daily, but I would say that [at the height of] the pandemic, I was on it daily for sure.”
If Amazon’s strategies were easy, everyone would be using them — so what’s the secret sauce behind Prime’s success? Here are the psychological reasons it’s hard to resist the platform:
A bang-for-your-buck mentality
Once you start paying for Amazon Prime, you want to make the most from your subscription — which usually means ordering more than you otherwise would.
“You don’t want to be that foolish person who is paying money for the membership you’re not using,” says Josh Lowitz, a partner at Consumer Intelligence Research Partners and principal of Chicago-based business advisory firm J. Lowitz Company. “So they decide, I’m going to make sure I get my money’s worth. And that decision to get your money’s worth then drives significantly more shopping.”
If you try to quit Amazon Prime’s 30-day free trial, Amazon will sometimes extend your trial for an additional seven days — or sometimes, even 30 more days — to eventually make you a paying subscriber. The extra incentive gives you more time to get hooked, and over time, you might finally give into paying for the service.
For Amazon, giving away an extra month is well worth signing you up for a year. Or, the company hopes, a lifetime.