People love exclusivity, even if it is designed for the masses and with Prime; Amazon has managed to design a loyalty programme that is changing the way sales takes place online. Launched three years ago in July in India, Amazon Prime offers superfast 1-2 day free delivery along with benefits in entertainment. What differentiates Prime is the fact that it has been able to understand a consumer’s desire and then package the solution in a way that amps the entire experience.
Evolution of Amazon Prime
With around 1.3 million products, Prime had a stellar opening in subscription numbers in July 2016. “Contrary to what perceptions in this country were, we found that customers are willing to pay for convenience. They are willing to pay more to get a little more. And when I say convenience, it’s convenience in entertainment, convenience in shopping, convenience in paying, convenience in just their general lives,” said Akshay Sahi, Director and Head of Amazon Prime India.
This encouraged the Prime team into widening the area of benefits and it launched Prime Video in December 2016, offering the Prime members free online streaming of blockbuster movies and TV series in various Indian languages. This was followed by spreading across different sectors of entertainment and shopping resulting in the launch of Prime Music for online streaming of music and Prime now for 2-hour delivery of groceries last year.
In the beginning, the Prime membership was available for Rs 499 per year along with free one-month subscription trials. The enthusiastic response gave Amazon the confidence to hike the fee to Rs 999 per year by 2017-end.
In the meantime, the e-commerce giant kept sweetening deals for Prime members by giving them early access to mega sales, lightning deals, and exclusive product launches, among others over regular Amazon members. In fact, Prime is today much more than merely providing fast delivery of products bought on the site. Music and videos form the other two key pillars of the programme and at the price-point, buying the membership often proves compelling.
When asked about the key factors that helped in making Amazon Prime a big success, Sahi says, one of the primary reasons is the nature and loyalty of customers. “Customers everywhere value convenience. And we realized that the ability to pay for convenience comes only when you have deep trust in the service that you’re receiving. You have to be able to build that trust. So it’s the combination of being able to provide services, continuously and consistently across all our values, across all our benefits.”
He added that starting from 1.3 million products in 2016, Amazon Prime now have over tens of millions products available for one-two day shipping to more and more locations where earlier logistics would have been pretty challenging.
“This is obviously done through huge strategic investments, selection planning, logistics infrastructure, building our technology and overall bringing capabilities to be able to serve millions of customers at the super high speeds with delivery accuracies of 95-98%,” Sahi quipped, adding that the service is being enjoyed in 18 countries by over 100 million paid Prime members worldwide.
While Sahi did not disclose the total number of paid Prime members from India, he said the membership have doubled over the last 18 months.
However, according to research and advisory firm, RedSeer, there are about 10 million Prime members of which only 40% actually pay for the membership while the rest have got it through bundled subscriptions. About 30% of Prime Members buy Prime for video and not for e-commerce value propositions (faster delivery/ free delivery/ prime-only offers). What has helped Amazon is the high decibel TV campaigns, which meant most Prime Members are aware of the Sales.
Going beyond shopping
Talking about how Amazon Prime has changed the online shopping ecosystem in the country, Sahi saiys, “When you look at the Indian online shopping ecosystem, you have to look at what customers want, what they need and how we can serve them better. And that in India extends beyond just shopping. We have so many customers coming online who really want to watch videos. So we made huge investments into both- technology and the content to create a really great video-watching experience. We also tied up with mobile operators to be able to distribute this product better.”
He added that at the same time they had a lot of offers running for Prime members in other categories, such as recharging your phone, peer to peer payments, paying for utilities, food, and travel, among others. It introduced a 20% cashback up to Rs 2,500 on booking any domestic travel on Prime Day 2018 along with offers on some of its food partners like, EazyDiner or Box8.
“So, what we realized is that in the Indian online ecosystem, customers have a lot of needs. It’s the ability to serve them more and more on these needs at tremendous value. And I think it’s that attitude which has distinguished us a little bit,” he said.
Celebration of Prime members
However, when it comes to shopping, India has a huge market with infinite number of sale events and various e-commerce websites. When asked about how Prime Day distinguishes itself from the others, Sahi said that the theme of Prime Day has always been a celebration of Prime members instead of being just a sale event. The idea was to bring something entirely new for the customers in every Prime Day keeping them excited and on their toes.
“In the first year of Prime Day in 2017 we launched our first original TV series- Inside Edge and its success motivated us to bring other originals such as Mirzapur and Comicstaan. At the same time what we had learned that customers really like to look for new things which are coming and they want to be the first to try something,” says Sahi.
Amazon India subsequently worked with brands and launched about thirty products, which were launching in India for the first time. “It worked so well in 2017 that we decided to double down last year and launched over 200 new products along with 7 new Prime video titles in 7 days (Similar to 14 titles in 14 days this year). We had even better sales in 2018. Further, we started launching products from regional sellers and experts, like silk and jewelry and stuff which everyone across the country, if not the world, likes to discover,” he said.
Sahi added that the month leading up to the Prime Day 2018 was the strongest as more people joined in that month than any other similar time-frame before.
Coming to this year’s Prime Day, the platform is bringing one-of-a-kind virtual reality based experience for its Prime members that enable the customers to inspect and view the product life-size before buying it. Say for example, you can look at what a fridge is going to look like in your kitchen, how it looks like when you open its double doors or you want to buy this dress, how does this really fall on a model or how a jewelry looks when you pick it up and hold it close to you face. This service will be available VR zones placed in selected malls in in Delhi NCR, Bengaluru, Chennai, Pune, Hyderabad and Kolkata from July 6 to July 16.
“The idea behind this was not to just do a gimmick, but if you have a thousand products, two hundred of which are new launches, making a decision to buy that without seeing it, without feeling it or looking at it in its proper dimensions is really tough. So to make it a little bit more convenient and fun with technology we created these VR zones where you can actually experience some of these products in real life,” he said.
Prime Day this year will be the longest ever starting from July 15 midnight until July 16.